NetSpend 2012 Annual Report Download - page 26

NetSpend Matter
A putative class action lawsuit has been filed in
connection with TSYS’ proposed acquisition of
NetSpend Holdings, Inc. (NetSpend). This lawsuit,
entitled Joan Litwin v. NetSpend Holdings, Inc. et al.,
was filed on February 22, 2013 in the Court of
Chancery of the State of Delaware and names TSYS,
NetSpend and the members of the board of directors
of NetSpend as defendants. This lawsuit was brought
by a purported stockholder of NetSpend, both
individually and on behalf of a putative class of
NetSpend stockholders, alleging that the members of
NetSpend’s board of directors breached their
fiduciary duties in connection with TSYS’ proposed
acquisition of NetSpend by depriving NetSpend’s
stockholders of the full and fair value of their
ownership interest in NetSpend and by failing to
inform NetSpend’s stockholders of material facts
regarding the proposed acquisition. The plaintiff
further alleges that NetSpend and TSYS aided and
abetted the alleged breaches by NetSpend’s board
of directors. The action seeks equitable relief,
including, among other things, to enjoin
consummation of TSYS’ acquisition of NetSpend,
rescission of the related Agreement and Plan of
Merger, an award of compensatory damages and/or
rescissory damages, and an award of all costs,
including reasonable attorneys’ fees and other
expenses. TSYS believes that this lawsuit is without
merit and intends to vigorously defend itself;
however, there can be no assurance that it will be
successful in its defense.
Forward-Looking Statements
Certain statements contained in this filing which are
not statements of historical fact constitute forward-
looking statements within the meaning of the Private
Securities Litigation Reform Act (the Act). These
forward-looking statements include, among others:
(i) TSYS’ expectation that the loss of Bank of America
as a merchant services client will not have a material
adverse effect on TSYS’ business; (ii) TSYS’
expectation that the Durbin Amendment will not
have a significant negative impact on TSYS’ business;
(iii) TSYS’ expectation with respect to foreign
currency exchange rates; (iv) TSYS’ expectation with
respect to the timing of the conversion of Bank of
America’s consumer card portfolios; (v) TSYS’
expectation that it will be able to fund a significant
portion of its capital expenditure needs through
internally generated cash in the future; (vi) TSYS’
earnings guidance for 2013 total revenues, revenues
before reimbursable items, net income attributable to
TSYS common shareholders and EPS attributable to
TSYS common shareholders; (vii) TSYS’ belief with
respect to lawsuits, claims and other complaints;
(viii) TSYS’ expectation with respect to certain tax
matters; (ix) the Board’s intention to continue to pay
cash dividends; (xi) statements regarding the pending
acquisition of NetSpend, and the assumptions
underlying such statements. In addition, certain
statements in future filings by TSYS with the
Securities and Exchange Commission, in press
releases, and in oral and written statements made by
or with the approval of TSYS which are not
statements of historical fact constitute forward-
looking statements within the meaning of the Act.
Examples of forward-looking statements include, but
are not limited to: (i) projections of revenue, income
or loss, earnings or loss per share, the payment or
nonpayment of dividends, capital structure and other
financial items; (ii) statements of plans and objectives
of TSYS or its management or Board of Directors,
including those relating to products or services;
(iii) statements of future economic performance;
(iv) statements regarding the pending acquisition of
NetSpend; and (v) statements of assumptions
underlying such statements. Words such as
“believes,” “anticipates,” “expects,” “intends,”
“targeted,” “estimates,” “projects,” “plans,” “may,”
“could,” “should,” “would,” and similar expressions
are intended to identify forward-looking statements
but are not the exclusive means of identifying these
statements.
These statements are based upon the current beliefs
and expectations of TSYS’ management and are
subject to significant risks and uncertainties. Actual
results may differ materially from those contemplated
by the forward-looking statements. A number of
important factors could cause actual results to differ
materially from those contemplated by our forward-
looking statements. Many of these factors are beyond
TSYS’ ability to control or predict. These factors
include, but are not limited to:
• movements in LIBOR are greater than expected
and draws on the revolving credit facility are
greater than expected;
• TSYS incurs expenses associated with the signing
of a significant client;
• internal growth rates for TSYS’ existing clients
are lower than anticipated whether as a result of
unemployment rates, card delinquencies and
charge off rates or otherwise;
• TSYS does not convert and deconvert clients’
portfolios as scheduled;
• adverse developments with respect to foreign
currency exchange rates;
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