Total System Services Inc

Total System Services — Q4 2016 Earnings Presentation

27 slides from Total System Services's earnings presentation, Jan 24, 2017

  1. Slide 1: 2016 Fourth Quarter and Full Year

    2016 FOURTH QUARTER AND FULL YEAR January 24, 2017 ©2017 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  2. Slide 2: Forward-Looking Statements

    2016 Fourth Quarter and Full Year FORWARD-LOOKING STATEMENTS This slide presentation and comments made by management contain forward- looking statements including, among others, statements regarding the expected future operating results of TSYS. These statements are based on management’s current exp

  3. Slide 3: Use of Non-GAAP Financial Measures

    2016 Fourth Quarter and Full Year USE OF NON-GAAP FINANCIAL MEASURES This slide presentation contains certain non-GAAP financial measures determined by methods other than in accordance with generally accepted accounting principles. Such non-GAAP financial measures include the following: net revenue,

  4. Slide 4: M. Troy Woods

    M. Troy Woods Chairman and Chief Executive Officer ©2017 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 4

  5. Slide 5: Paul Todd

    Paul Todd Chief Financial Officer ©2017 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 5

  6. Slide 6: Consolidated Selected Financial Highlights

    2016 Fourth Quarter and Full Year CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS (in thousands, except per share data) QTD QTD Percent YTD YTD Percent 2016 2015 Change 2016 2015 Change $1,132,224 $716,843 57.9% Total Revenues $4,170,077 $2,779,541 50.0% 785,709 645,095 21.8 Net Revenue(1) 3,041,876 2,49

  7. Slide 7: Consolidated Highlights

    2016 Fourth Quarter and Full Year CONSOLIDATED HIGHLIGHTS 4th Quarter Net Revenue by Segment(1) ➜ Net revenue increased 21.8% ➜ All segments met or exceeded goals NetSpend North America 38% ➜ Record traditional AOF 20% Merchant International 32% 10% Consolidated Net Revenue(1) Adjusted Operating Inc

  8. Slide 8: North America Segment Highlights

    2016 Fourth Quarter and Full Year NORTH AMERICA SEGMENT HIGHLIGHTS Traditional Accounts on File YOY Growth % ➜ Net revenue grew 1.4% - ahead of (in millions) 444.6 454.1 expectations 435.1 423.3 ➜ Five straight quarters of record level 415.1 traditional AOF ➜ Achieved record revenue and 37.3% 6.8% 7

  9. Slide 9: International Segment Highlights

    2016 Fourth Quarter and Full Year INTERNATIONAL SEGMENT HIGHLIGHTS Traditional Accounts on File YOY Growth % ➜ Net revenue up 6.2% (in millions) ➜ Record traditional AOF and transactions up 12.2% 66.6 67.7 65.1 65.5 66.0 ➜ Improved client sales pipeline 8.5% 6.6% 4.7% 5.2% 4.1%  17.8% 14.7% 10.0% 1

  10. Slide 10: Merchant Segment Highlights

    2016 Fourth Quarter and Full Year MERCHANT SEGMENT HIGHLIGHTS Segment Net Revenue by LOB(1) ➜ TransFirst integration on track and ($ in millions) YOY Growth % synergies ahead of target $48 $47 $49 $48 $46 6% (3%) (5%) 10% 7% ➜ Revenue growth driven by SMB and integrated channels’ focus $74 $74 $212

  11. Slide 11: NetSpend Segment Highlights

    2016 Fourth Quarter and Full Year NETSPEND SEGMENT HIGHLIGHTS Gross Dollar Volume ➜ Renewed PayPal and Liberty Tax and ($ in billions) YOY Growth % $9.2 signed new agreements with Giant Eagle and 7-Eleven ➜ Grew direct deposit cards by 12.7% $6.6 $6.4 $6.6 $5.7 ➜ 20 consecutive quarters of double- d

  12. Slide 12: Segment Operating Margin and Consolidated Adjusted Operating Margin

    2016 Fourth Quarter SEGMENT OPERATING MARGIN AND CONSOLIDATED ADJUSTED OPERATING MARGIN Three Months Ended December 31, 2016 Adjusted Segment Adjusted Operating (1) (1) (1) Operating Income Net Revenue Margin (in thousands) North America $117,296 $304,450 38.53% International 15,210 77,061 19.74% Me

  13. Slide 13: Segment Operating Margin and Consolidated Adjusted Operating Margin (Full Year)

    2016 Full Year SEGMENT OPERATING MARGIN AND CONSOLIDATED ADJUSTED OPERATING MARGIN Twelve Months Ended December 31, 2016 Adjusted Segment Adjusted Operating (1) (1) (1) Operating Income Net Revenue Margin (in thousands) North America $468,251 $1,206,013 38.83% International 56,774 313,631 18.10% Mer

  14. Slide 14: 2017 Guidance

    2016 Fourth Quarter and Full Year 2017 GUIDANCE* (in millions, except per share data) Range Range Percent Change Revenue: Total revenues (GAAP) $4,750 to $4,850 14% to 16% Net revenue (non-GAAP) (1) $3,275 to $3,375 8% to 11% Earnings per share (EPS) Diluted EPS (GAAP) $2.14 to $2.21 23% to 28% Adju

  15. Slide 15: Q&A

    Q&A ©2017 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 15

  16. Slide 16: Thank You

    THANK YOU ©2017 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  17. Slide 17: Appendix

    APPENDIX ©2017 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 17

  18. Slide 18: Appendix: Accounts on File Portfolio Summary

    2016 Fourth Quarter and Full Year APPENDIX: Accounts on File Portfolio Summary (in millions) December December % December September % 2016 2015 Change 2016 2016 Change Consumer 442.9 408.2 8.5 442.9 433.5 2.2 Commercial 47.9 45.4 5.4 47.9 48.0 (0.2) Other 31.0 26.6 16.8 31.0 29.7 4.5 Traditional AOF

  19. Slide 19: Appendix: Non-GAAP Items – Net Revenue, Adjusted EBITDA and Adjusted EPS

    2016 Fourth Quarter and Full Year APPENDIX: Non-GAAP Items – Net Revenue, Adjusted EBITDA and Adjusted EPS ➔ Net revenue is defined as total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment

  20. Slide 20: Appendix: Non-GAAP Reconciliation – Net Revenue

    2016 Fourth Quarter and Full Year APPENDIX: Non-GAAP Reconciliation – Net Revenue (in thousands) Three Months Ended Twelve Months Ended 12/31/16 12/31/15 12/31/16 12/31/15 $1,132,224 $716,843 Total revenues $4,170,077 $2,779,541 Less: reimbursable items, interchange and assessments 346,515 71,748 ex

  21. Slide 21: Appendix: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin

    2016 Fourth Quarter and Full Year APPENDIX: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin Three Months Ended Twelve Months Ended (in thousands) 12/31/16 12/31/15 12/31/16 12/31/15 Adjusted segment operating income By segment: North America services (a) $117,296 $10

  22. Slide 22: Appendix: Non-GAAP Reconciliation – Constant Currency Net Revenue

    2016 Fourth Quarter and Full Year APPENDIX: Non-GAAP Reconciliation – Constant Currency Net Revenue Twelve Months (in thousands) Three Months Ended Ended Percentage Percentage 12/31/16 12/31/15 Change 12/31/16 12/31/15 Change Consolidated: Constant currency(1) $801,145 $645,095 24.2% $3,081,534 $2,4

  23. Slide 23: Appendix: Non-GAAP Reconciliation – Constant Currency Total Revenues

    2016 Fourth Quarter and Full Year APPENDIX: Non-GAAP Reconciliation – Constant Currency Total Revenues (in thousands) Three Months Ended Twelve Months Ended Percentage Percentage 12/31/16 12/31/15 Change 12/31/16 12/31/15 Change Consolidated: Constant currency(1) $1,148,810 $716,843 60.3% $4,212,598

  24. Slide 24: Appendix: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA

    2016 Fourth Quarter and Full Year APPENDIX: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA Three Months Ended Twelve Months Ended (in thousands) 12/31/16 12/31/15 12/31/16 12/31/15 Net income : As reported (GAAP) $74,375 $84,716 $325,972 $369,041 Adjust for: Deduct: Income from discontinued op

  25. Slide 25: Appendix: Non-GAAP Reconciliation – Adjusted EPS

    2016 Fourth Quarter and Full Year APPENDIX: Non-GAAP Reconciliation – Adjusted EPS Three Months Ended Twelve Months Ended (in thousands, except per share data) 12/31/16 12/31/15 12/31/16 12/31/15 Income from continuing operations attributable to TSYS common shareholders: As reported (GAAP) (a) $73,9

  26. Slide 26: 2017 Guidance

    2016 Fourth Quarter and Full Year 2017 GUIDANCE* (in millions, except per share data) Range Range Percent Change Total revenues (GAAP) $4,750 to $4,850 14% to 16% Less: reimbursable items, interchange and assessments expenses 1,475 to 1,475 Net revenue (non-GAAP) $3,275 to $3,375 8% to 11% Diluted E

  27. Slide 27: Appendix: 2017 Guidance Assumptions

    2016 Fourth Quarter and Full Year APPENDIX: 2017 Guidance Assumptions The guidance assumes: • There will be no significant movements in the London Interbank Offered rate and TSYS will not make any significant draws on the remaining balance of its credit facility; • There will be no additional signif

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