Total System Services Inc

Total System Services — Q4 2014 Earnings Presentation

31 slides from Total System Services's earnings presentation, Jan 27, 2015

  1. Slide 1: 2014 Fourth Quarter and YTD Results

    2014 Fourth Quarter and YTD Results January 27, 2015 ©2015 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Statements This 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 expectations and assumptions and are subjec

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

    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: revenues before reimbursable items; operating

  4. Slide 4: Troy Woods, President & Chief Executive Officer

    Troy Woods President & Chief Executive Officer ©2015 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  5. Slide 5: Paul Todd, Chief Financial Officer

    Paul Todd Chief Financial Officer ©2015 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  6. Slide 6: 4Q 2014 North America Segment Highlights

    4Q 2014 North America Segment Highlights  Historical High Revenue Segment Revenue by Line of Business* 3%  Second Straight Quarter of Double Digit Growth Consumer (1)  Largest Quarter and Year of Operating Income 22% Commercial (2) 75% Other (1) Includes Credit, Debit, Retail, Prepaid & Loyalty (

  7. Slide 7: 4Q 2014 North America Segment Highlights

    4Q 2014 North America Segment Highlights  Six Straight Quarters of Double Digit Growth in Traditional Accounts on File*  Largest Quarter and Year of Transaction Volume  Same Client Transactions up 13.0% Accounts on File Transaction Volume YOY Growth % YOY Growth % 2,980.0 (in millions) 541.4 550.

  8. Slide 8: 4Q 2014 International Segment Highlights

    4Q 2014 International Segment Highlights  Revenue $92.9M* – Up 2.5% Segment Revenue by Region QTD ‒ Up 5.7% on Constant Currency 11% ‒ ($2.9M) of Currency Impact 5%  Processing Revenue Up in All Geographies Europe  Margin Expansion Continues MEA 84%  Extended Relationship with Carrefour Rest Of

  9. Slide 9: 4Q 2014 International Segment Highlights

    4Q 2014 International Segment Highlights  Same Client Transactions Grew 11.8% Accounts on File Transaction Volume YOY Growth % YOY Growth % 618.1 (in millions) 66.6 (in millions) 574.3 64.1 555.6 558.1 62.3 525.5 60.7 517.9 58.0 59.2 59.1 492.4 55.7 434.0 3.7% 9.9% 12.1% 8.5% 8.9% 7.5% 8.1% 12.7% 1

  10. Slide 10: 4Q 2014 Merchant Segment Highlights

    4Q 2014 Merchant Segment Highlights Segment Revenue by Mix*  Revenues Decreased 2.4%* QTD − Direct Up 2.6% with Continued Focus on Growth Initiatives − Indirect Down (9.1)% But Exceeded Expectations  Industry Veteran Hired to Lead TSYS Merchant 59% 41% Direct Solutions Indirect Segment Revenue* Ad

  11. Slide 11: 4Q 2014 Merchant Segment Highlights

    4Q 2014 Merchant Segment Highlights  POS Transactions Increased 4.4%, Excluding Deconverted Accounts  SBS Sales Volume Up 10.6%  Continued Investment in Product and Service Offerings SBS Sales Volume* Segment Revenue by LOB ($ in billions) YOY Growth % ($ in millions) YOY Growth % $5.8 $5.9 $5.7

  12. Slide 12: 4Q 2014 NetSpend Segment Highlights

    4Q 2014 NetSpend Segment Highlights Segment Revenue by Channel  Revenue $119.2M – Up 14.4% QTD  Added 5k Distributing Locations and 14% Partner Employers Retail  Bringing the Total to Over 85k 42% 34% Direct  Launched WalMart in Retail Channel Paycard 10% Segment Revenue Adjusted Segment Operati

  13. Slide 13: 4Q 2014 NetSpend Segment Highlights

    4Q 2014 NetSpend Segment Highlights  Direct Deposit Active Cards up 21.9%  Gross Dollar Volume (GDV) up 18.2%  Full Year 2014 Exceeded $20 Billion Direct Deposit Active Cards Gross Dollar Volume YOY Growth % YOY Growth % 2,070.3 $6,567.2 (in thousands) ($ in millions) 1,707.9 $5,378.7 1,600.7 1,6

  14. Slide 14: Consolidated Selected Financial Highlights

    Consolidated Selected Financial Highlights (in thousands, except per share data) 4thQtr 4th Qtr Percent YTD YTD Percent 2014 2013 Change 2014 2013 Change $635,104 $583,103 8.9% Total Revenues $2,446,877 $2,064,305 18.5% 569,301 525,259 8.4 Revenues Before Reimbursable Items 2,192,978 1,823,708 20.2

  15. Slide 15: Segment Operating Margin and Consolidated Adjusted Operating Margin

    Segment Operating Margin and Consolidated Adjusted Operating Margin Three Months Ended December 31, 2014 Adjusted Revenues before (in thousands) Segment Reimbursable Adjusted Operating Income Items Operating Margin North America $99,620 $255,539 38.98% International 22,849 92,895 24.60% Merchant 31,

  16. Slide 16: Segment Operating Margin and Consolidated Adjusted Operating Margin

    Segment Operating Margin and Consolidated Adjusted Operating Margin Twelve Months Ended December 31, 2014 Adjusted Revenues before (in thousands) Segment Reimbursable Adjusted Operating Income Items Operating Margin North America $351,512 $954,082 36.84% International 55,123 341,785 16.13% Merchant

  17. Slide 17: Rollforward of Quarterly Cash Balance

    Rollforward of Quarterly Cash Balance (in millions) $500 Operating Cap Ex Activities $171 ($68) Share Repurchase $400 ($50) Debt Pmts ($21) Dividends Ending ($19) Other Balance $300 Beginning ($10) $289 Balance $266 $200 $100 $0 9/30/2014 12/31/2014 17 ©2015 Total System Services, Inc.® Proprietary.

  18. Slide 18: Cash Flow Strength: 2014 Consolidated Financial Highlights

    Cash Flow Strength: 2014 Consolidated Financial Highlights (in millions) $750 $712 $675 $600 $561 $525 $450 $375 $325 $329 $300 $289 $225 $150 $75 $0 Adjusted EBITDA Cash flow from operations Free cash flow Net income Ending cash 18 ©2015 Total System Services, Inc.® Proprietary. All rights reserved

  19. Slide 19: 2015 Guidance

    2015 Guidance* (in millions, except per share data) Range Range Percent Change Total Revenues $2,620 to $2,660 7% to 9% Revenues Before Reimbursable Items $2,370 to $2,410 8% to 10% Adjusted EPS attributable to TSYS common shareholders from continuing operations $2.17 to $2.21 11% to 13% Average Bas

  20. Slide 20: Q&A

    Q&A ©2015 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  21. Slide 21: Appendix

    Appendix ©2015 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  22. Slide 22: Appendix: Non-GAAP Items – Adjusted EBITDA and Adjusted EPS

    Appendix: Non-GAAP Items – Adjusted EBITDA and Adjusted EPS • Adjusted EBITDA is net income excluding equity in income of equity investments, nonoperating income/(expense), taxes, depreciation, amortization and stock-based compensation expenses and NetSpend merger & acquisition expenses. • Adjusted

  23. Slide 23: Appendix: Accounts on File Portfolio Summary

    Appendix: Accounts on File Portfolio Summary (in millions) Dec Dec % Dec Sep % 2014 2013 Change 2014 2014 Change Consumer Credit 270.0 228.9 18.0 270.0 263.9 2.3 Retail 28.4 27.8 2.2 28.4 28.4 0.1 Total Consumer 298.4 256.7 16.3 298.4 292.3 2.1 Commercial 41.6 39.9 4.2 41.6 41.5 0.1 Other 22.4 18.9

  24. Slide 24: Appendix: Non-GAAP Reconciliation – Revenues Before Reimbursable Items

    Appendix: Non-GAAP Reconciliation – Revenues Before Reimbursable Items (in thousands) Three Months Ended Twelve Months Ended 12/31/14 12/31/13 12/31/14 12/31/13 Total Revenues $635,104 $583,103 $2,446,877 $2,064,305 Reimbursable Items 65,803 57,844 253,899 240,597 Revenues Before Reimbursable Items

  25. Slide 25: Appendix: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin

    Appendix: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin (in thousands) Three Months Ended Twelve Months Ended 12/31/14 12/31/13 12/31/14 12/31/13 Operating income $122,773 $108,858 $431,639 $382,500 Add: Acquisition intangible amort 24,166 24,751 96,971 65,893 Add:

  26. Slide 26: Appendix: Non-GAAP Reconciliation – Constant Currency

    Appendix: Non-GAAP Reconciliation – Constant Currency (in thousands) Three Percentage Twelve Percentage Months Ended Change Months Ended Change 12/31/14 12/31/13 12/31/14 12/31/13 Consolidated: Constant Currency (1) $638,111 $583,103 9.4% $2,431,947 $2,064,305 17.8% Foreign Currency (2) (3,007) ---

  27. Slide 27: Appendix: Non-GAAP Reconciliation – Constant Currency

    Appendix: Non-GAAP Reconciliation – Constant Currency (in thousands) Three Percentage Twelve Percentage Months Ended Change Months Ended Change 12/31/14 12/31/13 12/31/14 12/31/13 Consolidated: Constant Currency (1) $572,166 $525,259 8.9% $2,178,951 $1,823,708 19.5% Foreign Currency (2) (2,865) ---

  28. Slide 28: Appendix: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA

    Appendix: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA (in thousands) Three Months Ended Twelve Months Ended Dec Dec Dec Dec 2014 2013 2014 2013 Net income : As reported (GAAP) (a) $81,242 $69,393 $329,406 $256,597 Adjusted for: Add/(Deduct): Loss/(Income) from discontinued operations 3,338

  29. Slide 29: Appendix: Non-GAAP Reconciliation – Adjusted EPS

    Appendix: Non-GAAP Reconciliation – Adjusted EPS (in thousands) Three Months Ended Twelve Months Ended Dec Dec Dec Dec 2014 2013 2014 2013 Income from continuing operations available to TSYS Common Shareholders: As reported (GAAP) (a) $83,198 $66,058 $275,216 $246,893 Adjusted for amounts attributab

  30. Slide 30: Appendix: Non-GAAP Reconciliation – Free Cash Flow

    Appendix: Non-GAAP Reconciliation – Free Cash Flow (in thousands) Twelve Months Ended 12/31/2014 Cash Flows from Operating Activities $561,094 Less: Purchase of Property and Equipment (75,913) Additions to Licensed Computer Software from Vendors (29,638) Additions to Internally Developed Computer So

  31. Slide 31: Appendix: 2015 Guidance Assumptions

    Appendix: 2015 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 significant movement in foreign currency exchange r

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