UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
Annual report
pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended December 31, 2014
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.) |
|
|
|
| One TSYS Way
Columbus, Georgia |
|
31901 |
| (Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code: (706) 649-2310
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 x NO ¨
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 ¨ NO x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90
days. YES x NO ¨
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). YES x NO ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form
10-K. ¨
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.
|
|
|
|
|
|
|
| Large accelerated filer |
|
x |
|
Accelerated Filer |
|
¨ |
|
|
|
|
| Non-accelerated filer |
|
¨ |
|
Smaller reporting company |
|
¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). YES ¨ NO x
As of June 30, 2014, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was
approximately $5,670,370,000 based on the closing sale price as reported on the New York Stock Exchange.
As of February 18, 2015,
there were 185,053,781 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, 2014 (“Annual Report”) |
|
Parts I, II, III and IV |
|
|
| Portions of the 2015 Proxy Statement for the Annual Meeting of Shareholders to be held April 28, 2015 (“Proxy Statement”) |
|
Part III |
EXPLANATORY NOTE
Total System Services, Inc. is filing this Amendment No. 1 on Form 10-K/A for the sole purpose of amending Item 15 of its Annual
Report on Form 10-K for the year ended December 31, 2014, as filed with the Securities and Exchange Commission on February 26, 2015, to include Exhibit 99.1, the Annual Report on Form 11-K for the Total System Services, Inc. 2012 Employee
Stock Purchase Plan for the year ended December 31, 2014 as set forth below and in the attached exhibits. This Amendment No. 1 does not otherwise update information in the originally filed Form 10-K to reflect facts or events occurring
subsequent to the original filing date.
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 38 through 88 of the Annual Report.
Consolidated Balance Sheets -
December 31, 2014 and 2013
Consolidated Statements of Income - Years Ended December 31, 2014, 2013 and 2012
Consolidated Statements of Comprehensive Income - Years Ended December 31, 2014, 2013 and 2012
Consolidated Statements of Cash Flows - Years Ended December 31, 2014, 2013 and 2012
Consolidated Statements of Changes in Equity - Years Ended December 31, 2014, 2013 and 2012
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Management’s Report on Internal Control Over Financial Reporting
| |
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, 2014, 2013 and 2012
1
All other schedules are omitted because they are inapplicable or the required information is
included in the consolidated financial statements and notes thereto.
The following exhibits are filed herewith or are incorporated
to other documents previously filed with the SEC. Exhibits 10.6 through 10.37 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 |
|
|
| 2.1 |
|
Agreement and Plan of Merger, dated as of February 19, 2013, by and among TSYS, General Merger Sub, Inc. and NetSpend Holdings Inc., incorporated by reference to Exhibit 2.1 of TSYS’ Current Report on Form 8-K dated
February 19, 2013 |
|
|
| 2.2 |
|
First Amendment to the Agreement and Plan of Merger, dated as of May 29, 2013, which amended the Agreement and Plan of Merger, dated as of February 19, 2013, by and among TSYS, General Merger Sub, Inc. and NetSpend Holdings, Inc.,
incorporated by reference to Exhibit 2.1 of TSYS’ Current Report on Form 8-K dated May 29, 2013 |
|
|
| 3.1 |
|
Articles of Incorporation of TSYS, as amended, incorporated by reference to Exhibit 3.1 of TSYS’ Current Report on Form 8-K dated April 30, 2009 |
|
|
| 3.2 |
|
Bylaws of TSYS, as amended, incorporated by reference to Exhibit 3.1 of TSYS’ Current Report on Form 8-K dated July 28, 2009 |
|
|
| 4.1 |
|
Indenture, dated as of May 22, 2013, between TSYS and Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 4.1 of TSYS’ Current Report on Form 8-K dated May 22, 2013 |
|
|
| 4.2 |
|
Form of 2.375% Senior Note due 2018, incorporated by reference to Exhibit 4.2 of TSYS’ Current Report on Form 8-K dated May 22, 2013 |
2
|
|
|
| 4.3 |
|
Form of 3.750% Senior Note due 2023, incorporated by reference to Exhibit 4.3 of TSYS’ Current Report on Form 8-K dated May 22, 2013 |
|
|
| 10.1 |
|
Credit Agreement of TSYS, dated as of September 10, 2012, with JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Securities LLC, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Regions Capital Markets and U.S. Bank National
Association, as joint lead arrangers and joint bookrunners, and The Bank of Tokyo-Mitsubishi UFJ, Ltd., Regions Bank and U.S. Bank National Association, as Syndication Agents, and the other lenders named therein, incorporated by reference to Exhibit
10.1 of TSYS’ Current Report on Form 8-K dated September 11, 2012 |
|
|
| 10.2 |
|
First Amendment, dated as of April 8, 2013, to the Credit Agreement of TSYS, dated as of September 10, 2012, with JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Securities LLC, The Bank of Tokyo-Mitsubishi UFJ,
Ltd., Regions Capital Markets and U.S. Bank National Association, as joint lead arrangers and joint bookrunners, and The Bank of Tokyo-Mitsubishi UFJ, Ltd., Regions Bank and U.S. Bank National Association, as Syndication Agents, and the other
lenders named therein, incorporated by reference to Exhibit 10.2 of TSYS’ Current Report on Form 8-K dated April 8, 2013 |
|
|
| 10.3 |
|
Credit Agreement of TSYS, dated as of April 8, 2013, with JPMorgan Chase Bank, N.A., as Administrative Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Syndication Agent, Regions Bank and U.S. Bank National Association, as
Documentation Agents, and other lenders party thereto, with J.P. Morgan Securities LLC, The Bank of Tokyo Mitsubishi UFJ, Ltd., Regional Capital Markets, and U.S. Bank National Association, as joint lead arrangers and joint bookrunners, incorporated
by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated April 8, 2013 |
|
|
| 10.4 |
|
Voting Agreement, dated as of February 19, 2013, by and among TSYS and JLL Partners Fund IV, L.P., JLL Partners Fund V, L.P., Oak Investment Partners X, Limited Partnership and Oak X Affiliates Fund, L.P., incorporated by reference
to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated February 19, 2013 |
|
|
| 10.5 |
|
Commitment Letter, dated as of February 19, 2013, by and among TSYS, JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC and The Bank of Tokyo-Mitsubishi UFJ, Ltd., incorporated by reference to Exhibit 10.2 of TSYS’ Current
Report on Form 8-K dated February 19, 2013 |
3
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
|
|
|
| 10.6 |
|
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 |
|
|
| 10.7 |
|
Amended and Restated Total System Services, Inc. Deferred Compensation Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, as filed with the SEC on August
9, 2010 |
|
|
| 10.8 |
|
Amended and Restated Total System Services, Inc. Directors’ Deferred Compensation Plan, incorporated by reference to Exhibit 10.2 of TSYS’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, as filed with
the SEC on August 7, 2008 |
|
|
| 10.9 |
|
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 |
|
|
| 10.10 |
|
Split Dollar Insurance Agreement of TSYS, incorporated by reference to Exhibit 10.10 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 1993, as filed with the SEC on March 22, 1994 |
|
|
| 10.11 |
|
Change of Control Agreement for executive officers of TSYS, incorporated by reference to Exhibit 10.17 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as filed with the SEC on February 29,
2008 |
|
|
| 10.12 |
|
Split Dollar Insurance Agreement and related Executive Benefit Substitution Agreement, 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 |
|
|
| 10.13 |
|
Summary of Board of Directors Compensation, incorporated by reference to Exhibit 10.1 of TSYS’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, as filed with the SEC on August 6, 2012 |
|
|
| 10.14 |
|
Form of Stock Option Agreement for stock option awards under 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 |
4
|
|
|
|
|
| 10.15 |
|
Total System Services, Inc. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated April 24, 2007 |
|
|
| 10.16 |
|
Total System Services, Inc. 2012 Omnibus Plan (formerly named the 2008 Omnibus Plan), incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated May 4, 2012 |
|
|
| 10.17 |
|
Form of Revised Stock Option Agreement for stock option awards under the Total System Services, Inc. 2008 Omnibus Plan, incorporated by reference to Exhibit 10.2 of TSYS’ Current Report on Form 8-K dated February 5,
2008 |
|
|
| 10.18 |
|
Form of Retention Restricted Stock Award Agreement for retention restricted stock awards under the Total System Services, Inc. 2008 Omnibus Plan, incorporated by reference to Exhibit 10.3 of TSYS’ Current Report on Form 8-K
dated February 5, 2008 |
|
|
| 10.19 |
|
Form of Amended and Revised Stock Option Agreement for stock option awards under the Total System Services, Inc. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated March 28,
2008 |
|
|
| 10.20 |
|
Form of Amended and Revised Stock Option Agreement for 2008 stock option awards under the Total System Services, Inc. 2008 Omnibus Plan, incorporated by reference to Exhibit 10.3 of TSYS’ Current Report on Form 8-K dated March
28, 2008 |
|
|
| 10.21 |
|
Form of Amended and Revised Stock Option Agreement for 2009 stock option awards under the Total System Services, Inc. 2007 and 2008 Omnibus Plans, incorporated by reference to Exhibit 10.40 of TSYS’ Annual Report on Form 10-K
for the fiscal year ended December 31, 2008, as filed with the SEC on February 27, 2009 |
|
|
| 10.22 |
|
Form of Stock Option Agreement for 2010 stock option awards under the Total System Services, Inc. 2008 Omnibus Plan, incorporated by reference to Exhibit 10.4 of TSYS’ Quarterly Report on Form 10-Q for the quarter ended March
31, 2010, as filed with the SEC on May 7, 2010 |
|
|
| 10.23 |
|
Form of Performance-Based Special Stock Option Agreement for performance-based stock option awards under the Total System Services, Inc. 2008 Omnibus Plan, incorporated by reference to Exhibit 10.6 of TSYS’ Quarterly Report on
Form 10-Q for the quarter ended March 31, 2010, as filed with the SEC on May 7, 2010 |
|
|
| 10.24 |
|
Form of Non-Employee Director Fully Vested Stock Option Agreement for the Total System Services, Inc. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.37 of TSYS’ Annual Report on Form 10-K for the fiscal year ended
December 31, 2010, as filed with the SEC on February 28, 2011 |
5
|
|
|
|
|
| 10.25 |
|
Form of Non-Employee Director Fully Vested Share Award Agreement for the Total System Services, Inc. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.38 of TSYS’ Annual Report on Form 10-K for the fiscal year ended
December 31, 2010, as filed with the SEC on February 28, 2011 |
|
|
| 10.26 |
|
Form of Stock Option Agreement for 2011 stock option awards under the Total System Services, Inc. 2008 Omnibus Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Quarterly Report on Form 10-Q for the quarter ended March
31, 2011, as filed with the SEC on May 6, 2011 |
|
|
| 10.27 |
|
Form of Performance Share Agreement for 2011 performance share awards under the Total System Services, Inc. 2008 Omnibus Plan, incorporated by reference to Exhibit 10.2 of TSYS’ Quarterly Report on Form 10-Q for the quarter
ended March 31, 2011, as filed with the SEC on May 6, 2011 |
|
|
| 10.28 |
|
Form of Indemnification Agreement for directors and executive officers of TSYS, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated July 25, 2007 |
|
|
| 10.29 |
|
Form of Senior Executive Stock Option Agreement for 2012 stock option awards under the Total System Services, Inc. 2008 Omnibus Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Quarterly Report on Form 10-Q for the
quarter ended March 31, 2012, as filed with the SEC on May 7, 2012 |
|
|
| 10.30 |
|
Form of Senior Executive Performance Share Agreement for 2012 performance share awards under the Total System Services, Inc. 2008 Omnibus Plan, incorporated by reference to Exhibit 10.2 of TSYS’ Quarterly Report on Form 10-Q
for the quarter ended March 31, 2012, as filed with the SEC on May 7, 2012 |
|
|
| 10.31 |
|
Form of Senior Executive Stock Option Agreement for 2013 stock option awards under the Total System Services, Inc. 2012 Omnibus Plan, incorporated by reference to Exhibit 10.3 of TSYS’ Quarterly Report on Form 10-Q for the
Quarter ended March 31, 2013, as filed with the SEC on May 8, 2013 |
6
|
|
|
|
|
| 10.32 |
|
Form of Senior Executive Performance Share Agreement for 2013 performance share awards under the Total System Services, Inc. 2012 Omnibus Plan, incorporated by reference to Exhibit 10.4 of TSYS’ Quarterly Report on Form 10-Q
for the Quarter ended March 31, 2013, as filed with the SEC on May 8, 2013 |
|
|
| 10.33 |
|
Form of Senior Executive Stock Option Agreement for 2014 stock option awards under the Total System Services, Inc. 2012 Omnibus Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Quarterly Report on Form 10-Q for the
Quarter ended March 31, 2014, as filed with the SEC on May 8, 2014 |
|
|
| 10.34 |
|
Form of Senior Executive Performance Share Agreement for 2014 performance share awards under the Total System Services, Inc. 2012 Omnibus Plan, incorporated by reference to Exhibit 10.2 of TSYS’ Quarterly Report on Form 10-Q
for the Quarter ended March 31, 2014, as filed with the SEC on May 8, 2014 |
|
|
| 10.35 |
|
Transition and Retirement Agreement, dated June 23, 2014, between Philip W. Tomlinson and Total System Services, Inc., incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated June 23, 2014. |
|
|
| 10.36 |
|
Restrictive Covenant Agreement, dated June 23, 2014, between Philip W. Tomlinson and Total System Services, Inc., incorporated by reference to Exhibit 10.2 of TSYS’ Current Report on Form 8-K dated June 23, 2014. |
|
|
| 10.37 |
|
Consulting Agreement, dated June 23, 2014, between Philip W. Tomlinson and Total System Services, Inc., incorporated by reference to Exhibit 10.3 of TSYS’ Current Report on Form 8-K dated June 23, 2014. |
|
|
| 13.1 |
|
Certain specified pages of TSYS’ 2014 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 |
|
|
| 24.1 |
|
Powers of Attorney contained on the signature pages of this 2014 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 |
7
|
|
|
|
|
| 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. 2012 Employee Stock Purchase Plan for the year ended December 31, 2014 |
|
|
| 101 |
|
Interactive Data File |
We agree to furnish the SEC, upon request, a copy of each instrument with respect to issues of
long-term debt. The principal amount of any individual instrument, which has not been previously filed, does not exceed ten percent of the total assets of TSYS and our subsidiaries on a consolidated basis.
8
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. |
|
|
|
|
| April 10, 2015 |
|
|
|
By: |
|
/s/ M. Troy Woods |
|
|
|
|
|
|
M. Troy Woods, |
|
|
|
|
|
|
President and Chief Executive Officer |
|
|
|
|
|
|
(Principal Executive Officer) |
9
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Plan Administrator
Total System Services, Inc.
2012 Employee Stock Purchase Plan
We consent to
the incorporation by reference in the registration statement (No. 333-181790) on Form S-8 of Total System Services, Inc. of our report dated April 10, 2015, with respect to the statements of financial condition of the Total System Services,
Inc. 2012 Employee Stock Purchase Plan (the “Plan”) as of December 31, 2014 and 2013 and the related statements of operations and changes in plan equity for each of the years in the two-year period ended December 31, 2014 and the
period from inception (July 1, 2012) to December 31, 2012, which report appears in the December 31, 2014 annual report on Form 11-K of the Plan, included as Exhibit 99.1 to the December 31, 2014 annual report Form 10-K/A Amendment
No. 1 of Total System Services, Inc.
|
| /s/ KPMG LLP |
|
| Atlanta, Georgia |
| April 10, 2015 |
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, M. Troy Woods, certify that:
| 1. |
I have reviewed this Amendment No. 1 to the annual report on Form 10-K of Total System Services, Inc.; |
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report; |
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report; |
| 4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| |
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| |
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and |
| |
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter
in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions): |
| |
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and |
| |
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
|
|
|
|
|
| Date: April 10, 2015 |
|
|
|
/s/ M. Troy Woods |
|
|
|
|
M. Troy Woods |
|
|
|
|
President and Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Paul M. Todd, certify that:
| 1. |
I have reviewed this Amendment No. 1 to the annual report on Form 10-K of Total System Services, Inc.; |
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report; |
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report; |
| 4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| |
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| |
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and |
| |
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter
in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions): |
| |
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and |
| |
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
|
|
|
|
|
| Date: April 10, 2015 |
|
|
|
/s/ Paul M. Todd |
|
|
|
|
Paul M. Todd |
|
|
|
|
Chief Financial Officer |
Exhibit 99.1
FORM 11-K
(Mark One)
| x |
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the fiscal year ended December 31, 2014
OR
| ¨ |
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from
To
Commission file number 1-10254
TOTAL SYSTEM
SERVICES, INC. 2012 EMPLOYEE STOCK PURCHASE PLAN
TOTAL SYSTEM SERVICES, INC.
ONE TSYS WAY
COLUMBUS,
GEORGIA 31901
(706) 649-2310
TOTAL SYSTEM SERVICES, INC.
2012 EMPLOYEE STOCK PURCHASE PLAN
Financial Statements
December 31, 2014, 2013, and 2012
(With Report of Independent Registered Public Accounting Firm Thereon)
Report of Independent Registered Public Accounting Firm
The Plan Administrator
Total System Services, Inc.
2012 Employee Stock Purchase Plan:
We have
audited the accompanying statements of financial condition of the Total System Services, Inc. 2012 Employee Stock Purchase Plan (the Plan) as of December 31, 2014 and 2013, and the related statements of operations and changes in plan
equity for each of the years in the two-year period ended December 31, 2014 and the period from inception (July 1, 2012) to December 31, 2012. These financial statements are the responsibility of the Plan’s management. Our
responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial condition of the Plan as of December 31, 2014 and 2013, and the results of its operations and changes in its plan equity for each of the years in the two-year period
ended December 31, 2014 and the period from inception (July 1, 2012) to December 31, 2012, in conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
Atlanta, Georgia
April 10, 2015
TOTAL SYSTEM SERVICES, INC.
2012 EMPLOYEE STOCK PURCHASE PLAN
Statements of Financial Condition
December 31, 2014 and 2013
|
|
|
|
|
|
|
|
|
| |
|
2014 |
|
|
2013 |
|
| Assets |
|
|
|
|
|
|
|
|
|
|
|
| Common stock of Total System Services, Inc., at fair value – 1,885,717 and 1,911,887 shares (cost $41,458,984 and $38,547,202) in
2014 and 2013, respectively |
|
$ |
64,038,961 |
|
|
|
63,627,599 |
|
| Dividends receivable |
|
|
187,198 |
|
|
|
191,163 |
|
| Contributions receivable |
|
|
419,253 |
|
|
|
407,278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
64,645,412 |
|
|
|
64,226,040 |
|
|
|
|
|
|
|
|
|
|
| Plan Equity |
|
|
|
|
|
|
|
|
|
|
|
| Plan equity (3,488 and 2,445 active participants and 3,575 and 2,432 actively contributing participants at December 31, 2014 and
2013, respectively) |
|
$ |
64,645,412 |
|
|
|
64,226,040 |
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
2
TOTAL SYSTEM SERVICES, INC.
2012 EMPLOYEE STOCK PURCHASE PLAN
Statements of Operations and Changes in Plan Equity
Years ended December 31, 2014 and 2013 and Period from inception (July 1, 2012) to December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2014 |
|
|
2013 |
|
|
2012 |
|
| Investment income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
| Dividend income |
|
$ |
753,760 |
|
|
|
783,650 |
|
|
|
395,846 |
|
| Realized gain on withdrawals/distributions to participants (note 6) |
|
|
3,843,756 |
|
|
|
3,369,243 |
|
|
|
862,186 |
|
| Unrealized (depreciation) appreciation in common stock of Total System Services, Inc. (note 5) |
|
|
(2,500,423 |
) |
|
|
20,040,603 |
|
|
|
(5,870,362 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total investment income (loss) |
|
|
2,097,093 |
|
|
|
24,193,496 |
|
|
|
(4,612,330 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Contributions: |
|
|
|
|
|
|
|
|
|
|
|
|
| Participants |
|
|
8,607,533 |
|
|
|
7,936,752 |
|
|
|
3,845,750 |
|
| Participating Employers: |
|
|
|
|
|
|
|
|
|
|
|
|
| Total System Services, Inc. |
|
|
909,892 |
|
|
|
883,774 |
|
|
|
431,625 |
|
| Columbus Depot Equipment Company |
|
|
85 |
|
|
|
78 |
|
|
|
36 |
|
| Columbus Productions, Inc. |
|
|
5,231 |
|
|
|
5,068 |
|
|
|
2,659 |
|
| TSYS Canada, Inc. |
|
|
17,123 |
|
|
|
17,289 |
|
|
|
8,284 |
|
| TermNet Merchant Services, Inc. |
|
|
117,049 |
|
|
|
6,626 |
|
|
|
1,907 |
|
| TSYS Merchant Solutions, L.L.C. |
|
|
42,917 |
|
|
|
111,557 |
|
|
|
13,713 |
|
| TSYS Acquiring Solutions, L.L.C. |
|
|
250 |
|
|
|
49,537 |
|
|
|
46,299 |
|
| TSYS International |
|
|
123,383 |
|
|
|
124,811 |
|
|
|
66,534 |
|
| ProPay, Inc. |
|
|
14,415 |
|
|
|
15,996 |
|
|
|
— |
|
| NetSpend corporation |
|
|
51,498 |
|
|
|
14,981 |
|
|
|
— |
|
| Skylight Financial, Inc. |
|
|
9,293 |
|
|
|
2,462 |
|
|
|
— |
|
| Infonox on the Web |
|
|
— |
|
|
|
— |
|
|
|
5,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total contributions |
|
|
9,898,669 |
|
|
|
9,168,931 |
|
|
|
4,422,613 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Increase (decrease) in Plan equity before withdrawals |
|
|
11,995,762 |
|
|
|
33,362,427 |
|
|
|
(189,717 |
) |
|
|
|
|
| Withdrawals by participants – common stock of Total System Services, Inc., at fair value (463,451 and 197,181 shares,
respectively) (note 6) |
|
|
(11,576,390 |
) |
|
|
(12,395,787 |
) |
|
|
(4,552,547 |
) |
| Rollover from predecessor plan, at fair value (note 1) |
|
|
— |
|
|
|
— |
|
|
|
48,001,664 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Increase in Plan equity |
|
|
419,372 |
|
|
|
20,966,640 |
|
|
|
43,259,400 |
|
|
|
|
|
| Plan equity at beginning of year |
|
|
64,226,040 |
|
|
|
43,259,400 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Plan equity at end of year |
|
$ |
64,645,412 |
|
|
|
64,226,040 |
|
|
|
43,259,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
3
TOTAL SYSTEM SERVICES, INC.
2012 EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2014, 2013 and 2012
| (1) |
Description of the Plan |
On January 31, 2012, the board of directors of Total
System Services, Inc. (TSYS) adopted the Total System Services, Inc. 2012 Employee Stock Purchase Plan (the Plan). The Plan was approved by the TSYS shareholders on May 1, 2012, and became effective as of July 1, 2012. On July 1,
2012, the plan assets of the predecessor plan, the Total System Services, Inc. Employee Stock Purchase Plan, were rolled over into the Plan. The Plan is designed to enable participating Total System Services, Inc. (TSYS) and participating
subsidiaries’ employees to purchase shares of common stock of TSYS at prevailing market prices from contributions made by them and by TSYS and its subsidiaries (the Participating Employers).
TSYS serves as the Plan Administrator. The Plan agent is ComputerShare Shareowner Services, LLC, hereafter referred to as “Agent.”
All employees based in the United States who work 20 hours per week or more are eligible to participate in the Plan on the first
payroll date after completing three months of continuous employment. Employees of TSYS or TSYS affiliates who are employed in a country other than the United States are not eligible to participate in the Plan unless the Plan is registered or
qualified in the employee’s country of residence.
Participants contribute to the Plan through payroll deductions as a percentage of
compensation. The maximum allowable contribution ranges from 3% to 7% of compensation based on years of service. The maximum amount of compensation that may be taken into account under the Plan on an annual basis is $250,000. The minimum allowable
contribution is 1% of compensation. Matching contributions to the Plan are to be made by the Participating Employers in an amount equal to 0-50% of each participant’s contribution, with the percentage of the matching contribution to be set by
the TSYS Board of Directors. As of December 31, 2014 and 2013, the Participating Employers’ match was 15%. Participants are immediately vested in their contributions and Participating Employers’ matching contributions.
The Plan provides, among other things, that all expenses of the Plan and its administration shall be paid by TSYS with the exception of
brokers’ fees, commissions, and transaction costs, which are included in the cost of each participant’s investment in common stock of TSYS.
The Plan maintains an account balance for each participant equal to the number of shares of TSYS common stock purchased on his/her behalf, plus
related investment income or loss. Each participant has the rights and powers of ordinary TSYS shareholders over the shares of common stock held for his or her benefit in the Plan, including the right to vote his or her shares. Each participant will
receive cash dividends, stock dividends, stock splits and similar changes in ownership for the shares held in the Plan to the same extent as other ordinary TSYS shareholders.
The Plan requires that TSYS shares purchased under the Plan be held for six months, and after that time, each participant may withdraw all or
some of his or her account balance. The participant may elect to receive the proceeds in the form of shares of common stock of TSYS or in a lump-sum cash distribution.
The Plan provides that upon termination of participation in the Plan, each former participant will receive, at his or her discretion,
(i) the full number of shares of TSYS common stock held on his or her behalf by the Agent, together with a check for any fractional share interest, or (ii) a lump-sum cash distribution for the
proceeds of the sale of all shares held on his or her behalf by the Agent.
TOTAL SYSTEM SERVICES, INC.
2012 EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2014, 2013 and 2012
Participation in the Plan shall automatically terminate upon termination of a
participant’s employment whether by death, retirement, or otherwise.
TSYS expects to maintain the Plan indefinitely, but reserves the
right to terminate or amend the Plan at any time, provided, however, that no termination or amendment shall affect or diminish any participant’s right to the benefit of contributions made by him or her, or his or her Participating Employer
prior to the date of such amendment or termination.
TSYS reserves the right to suspend Participating Employer contributions to the Plan if
its board of directors feels that TSYS’ financial condition warrants such action.
| (2) |
Summary of Significant Accounting Policies |
The preparation of financial statements in
conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
The Plan’s investment in common stock of TSYS is stated at fair value,
which is based on the closing price at year-end obtained by using market quotations on the principal public exchange market for which such securities are traded. The December 31, 2014 and 2013, fair value
was $33.96 and $33.28 per share, respectively.
The Plan’s investment in the common stock of TSYS is exposed to market and credit
risks. Due to the level of risk associated with investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts
reported in the Plan’s financial statements.
The realized gain or loss on distributions to participants is determined by computing
the difference between the average cost per share and the fair value per share at the date of the distribution to the participants, less transaction costs.
Contributions to the Plan by TSYS and participating employees are accounted for on the accrual basis. Withdrawals are accounted for upon
distribution. At December 31, 2014 and 2013, Plan investments include 4,619 and 22,795 shares held by 28 and 69, respectively, terminated employees, who had not yet requested distribution in accordance with the terms of the Plan.
Purchases and sales of TSYS common stock are reflected on a trade-date basis. Dividend income is
accrued on the record date.
TOTAL SYSTEM SERVICES, INC.
2012 EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2014, 2013 and 2012
| (3) |
Fair Value Measurements |
The Plan determines the fair value of its assets consistent
with the provisions of the accounting standard for fair value measurements and disclosures. The accounting standard provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of
the fair value hierarchy under the accounting standard are described below:
Level 1 – inputs are unadjusted quoted prices in
active markets for identical assets or liabilities that the Plan has the ability to access.
Level 2 – inputs use other inputs
that are observable, either directly or indirectly. These inputs include quoted prices for similar assets and liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.
Level 3 – inputs are unobservable inputs, including inputs that are available in situations where there is little, if any,
market activity for the related asset or liability.
In instances where inputs used to measure fair value fall into different levels of the
fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Plan’s investment in TSYS common stock is considered a Level 1 input under the fair
value hierarchy.
Management of the Plan also believes that the carrying amount of the receivables is a reasonable approximation of fair
value due to their short-term nature.
| (4) |
Tax Status of the Plan |
The Plan is not qualified under Sections 401(a) or 501(a)
of the Internal Revenue Code of 1986, as amended. The Plan does not provide for income taxes because any income is taxable to the participants. Participants in the Plan must treat as compensation income their pro rata share of contributions made to
the Plan by their Participating Employer. Cash dividends paid on common stock of TSYS purchased under the Plan will be taxable to the participants on a pro rata basis for Federal and state income tax purposes during the year any such dividend is
received by the participant or the Plan. Upon disposition of the common stock of TSYS purchased under the Plan, participants must treat any gain or loss as long-term or
short-term capital gain or loss depending upon when such disposition occurs.
| (5) |
Unrealized (Depreciation) Appreciation in Common Stock of TSYS |
Changes in unrealized
(depreciation) appreciation in common stock of TSYS are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2014 |
|
|
2013 |
|
|
2012 |
|
| Unrealized appreciation at beginning of period |
|
$ |
25,080,400 |
|
|
|
5,039,797 |
|
|
|
— |
|
| Unrealized appreciation from predecessor plan |
|
|
— |
|
|
|
— |
|
|
|
10,910,159 |
|
| Unrealized appreciation at end of period |
|
|
22,579,977 |
|
|
|
25,080,400 |
|
|
|
5,039,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total unrealized (depreciation) appreciation |
|
$ |
(2,500,423 |
) |
|
|
20,040,603 |
|
|
|
(5,870,362 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL SYSTEM SERVICES, INC.
2012 EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 2014, 2013 and 2012
| (6) |
Realized Gain on Withdrawals/Distributions to Participants |
The gain realized on
withdrawal/distributions to participants is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2014 |
|
|
2013 |
|
|
2012 |
|
| Market value at dates of distribution or redemption of shares of common stock of TSYS |
|
$ |
11,576,390 |
|
|
|
12,395,788 |
|
|
|
4,552,547 |
|
| Less cost (computed on an average cost basis) of shares of common stock of TSYS distributed or redeemed |
|
|
7,732,634 |
|
|
|
9,026,545 |
|
|
|
3,690,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total realized gain |
|
$ |
3,843,756 |
|
|
|
3,369,243 |
|
|
|
862,186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total System Services (NYSE:TSS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Total System Services (NYSE:TSS)
Historical Stock Chart
From Apr 2023 to Apr 2024
