Total System Services Inc

Total System Services — Q2 2015 Earnings Presentation

29 slides from Total System Services's earnings presentation, Jul 28, 2015

  1. Slide 1: 2015 Second Quarter and YTD Results

    2015 Second Quarter and YTD Results July 28, 2015 ©2015 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  2. Slide 2: Forward-Looking Statements

    2015 Second Quarter and YTD Results > 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 expect

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

    2015 Second Quarter and YTD Results > 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

  4. Slide 4: Troy Woods

    Troy Woods Chairman, President & Chief Executive Officer ©2015 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 4

  5. Slide 5: Paul Todd

    Paul Todd Chief Financial Officer ©2015 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 5

  6. Slide 6: Consolidated Selected Financial Highlights

    2015 Second Quarter and YTD Results > CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS (in thousands, except per share data) 2nd Qtr 2nd Qtr Percent YTD YTD Percent 2015 2014 Change 2015 2014 Change $692,652 $602,036 15.1% Total Revenues $1,354,808 $1,194,883 13.4% 622,084 538,067 15.6 Revenues Before Rei

  7. Slide 7: 2Q 2015 Consolidated Highlights

    2015 Second Quarter and YTD Results > 2Q 2015 CONSOLIDATED HIGHLIGHTS ➔ Double digit organic revenue growth Revenue by Segment* ➔ Strong cross segment delivery of performance North America ➔ Volume gains: ➔ AOF increased 31.2% 23% International ➔ All-time AOF high of 751M 45% Merchant ➔ Issuer trans

  8. Slide 8: 2Q 2015 North America Segment Highlights

    2015 Second Quarter and YTD Results > 2Q 2015 NORTH AMERICA SEGMENT HIGHLIGHTS Accounts on File 677.5 ➔ All-time quarterly highs YOY Growth % 653.2 － Revenue and operating income － Accounts on file up 32.8% to 677.5M (in millions) 541.4 550.0 － Traditional AOF up 46.3% to 405.4M 510.3 495.5 － Transa

  9. Slide 9: 2Q 2015 International Segment Highlights

    2015 Second Quarter and YTD Results > 2Q 2015 INTERNATIONAL SEGMENT HIGHLIGHTS Accounts on File 73.9 ➔ Continued positive constant currency YOY Growth % 70.5 revenue growth trend (in millions) 66.6 64.1 ➔ Accounts on file increased 18.5% to 73.9M 60.7 62.3 59.2 59.1 ➔ Transactions increased 10.0% to

  10. Slide 10: 2Q 2015 Merchant Segment Highlights

    2015 Second Quarter and YTD Results > 2Q 2015 MERCHANT SEGMENT HIGHLIGHTS Segment Revenue by LOB ➔ Revenue up 8.8% and operating margin up ($ in millions) YOY Growth % 416 bps YOY ➔ Revenue mix: 61% Direct; 39% Indirect $62 $65 $64 $67 $71 $63 $62 $59 ➔ SBS Sales Volume at $6.3B, up 10% YOY 26% 22%

  11. Slide 11: 2Q 2015 NetSpend Segment Highlights

    2015 Second Quarter and YTD Results > 2Q 2015 NETSPEND SEGMENT HIGHLIGHTS Gross Dollar Volume ➔ Gross Dollar Volume (GDV) up 19.5% ($ in billions) YOY Growth % $7.7 ➔ Total active cards at 3.9M, up 14.7% $6.6 ➔ Direct deposit active cards at 1.9M, up 17.4% $5.5 ➔ Extended relationship with MetaBank

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

    2015 Second Quarter and YTD Results > SEGMENT OPERATING MARGIN AND CONSOLIDATED ADJUSTED OPERATING MARGIN Three Months Ended June 30, 2015 Adjusted Revenues before (in thousands) Segment Reimbursable Adjusted Operating Income Items Operating Margin North America $108,385 $287,199 37.74% Internationa

  13. Slide 13: Segment Operating Margin and Consolidated Adjusted Operating Margin (Six Months)

    2015 Second Quarter and YTD Results > SEGMENT OPERATING MARGIN AND CONSOLIDATED ADJUSTED OPERATING MARGIN Six Months Ended June 30, 2015 Adjusted Revenues before (in thousands) Segment Reimbursable Adjusted Operating Income Items Operating Margin North America $210,956 $553,418 38.12% International

  14. Slide 14: Rollforward of Quarterly Cash Balance

    2015 Second Quarter and YTD Results > ROLLFORWARD OF QUARTERLY CASH BALANCE (in millions) Operating Activities Cap Ex $500 $127 ($53) Share Repurchase ($29) Debt Pmts Dividends Ending $400 Beginning ($11) ($19) Other $6 Balance Balance $349 $328 $300 $200 $100 $0 3/31/2015 6/30/2015 ©2015 Total Syst

  15. Slide 15: Cash Flow Strength: 2015 TTM Consolidated Financial Highlights

    2015 Second Quarter and YTD Results > CASH FLOW STRENGTH: 2015 TTM Consolidated Financial Highlights (in millions) $900 $825 $792 $750 $675 $606 $600 $525 $450 $379 $375 $329 $349 $300 $225 $150 $75 $0 Adjusted EBITDA Cash flow from operations Free cash flow Net income Ending cash (TTM = Trailing Tw

  16. Slide 16: 2015 Revised Guidance

    2015 Second Quarter and YTD Results > 2015 REVISED GUIDANCE* (in millions, except per share data) Range Range Percent Change Total Revenues $2,667 to $2,716 9% to 11% Revenues Before Reimbursable Items $2,412 to $2,456 10% to 12% Adjusted EPS attributable to TSYS common shareholders from continuing

  17. Slide 17: Q&A

    Q&A ©2015 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 17

  18. Slide 18: Appendix

    Appendix ©2015 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 18

  19. Slide 19: Non-GAAP Items – Adjusted EBITDA and Adjusted EPS

    2015 Second Quarter and YTD Results > 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 merg

  20. Slide 20: Accounts on File Portfolio Summary

    2015 Second Quarter and YTD Results > APPENDIX: Accounts on File Portfolio Summary (in millions) Jun Jun % Jun Mar % 2015 2014 Change 2015 2015 Change Consumer Credit 374.1 246.5 51.8 374.1 364.5 2.6 Retail 26.4 27.9 (5.6) 26.4 28.3 (6.7) Total Consumer 400.5 274.4 45.9 400.5 392.8 2.0 Commercial 44

  21. Slide 21: Non-GAAP Reconciliation – Revenues Before Reimbursable Items

    2015 Second Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – Revenues Before Reimbursable Items (in thousands) Three Months Ended Six Months Ended 6/30/15 6/30/14 6/30/15 6/30/14 Total Revenues $692,652 $602,036 $1,354,808 $1,194,883 Reimbursable Items 70,568 63,969 136,940 124,065 Reve

  22. Slide 22: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin

    2015 Second Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin Three Months Ended Six Months Ended (in thousands) 6/30/15 6/30/14 6/30/15 6/30/14 Operating income $130,602 $98,763 $253,098 $179,460 Add: Acquisition intangible amort 22

  23. Slide 23: Non-GAAP Reconciliation – Constant Currency

    2015 Second Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – Constant Currency (in thousands) Three Percentage Six Percentage Months Ended Change Months Ended Change 6/30/15 6/30/14 6/30/15 6/30/14 Consolidated: Constant Currency (1) $702,191 $602,036 16.6% $1,372,054 $1,194,883 14.8% F

  24. Slide 24: Non-GAAP Reconciliation – Constant Currency

    2015 Second Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – Constant Currency (in thousands) Three Percentage Six Percentage Months Ended Change Months Ended Change 6/30/15 6/30/14 6/30/15 6/30/14 Consolidated: Constant Currency (1) $631,025 $538,067 17.3% $1,233,927 $1,070,818 15.2% F

  25. Slide 25: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA

    2015 Second Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA (in thousands) Three Months Ended Six Months Ended Jun Jun Jun Jun 2015 2014 2015 2014 Net income : As reported (GAAP) (a) $83,375 $111,340 $162,274 $162,965 Adjusted for: Deduct: Income from discont

  26. Slide 26: Non-GAAP Reconciliation – Adjusted EPS

    2015 Second Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – Adjusted EPS (in thousands) Three Months Ended Six Months Ended Jun Jun Jun Jun 2015 2014 2015 2014 Income from continuing operations available to TSYS Common Shareholders: As reported (GAAP) (a) $82,839 $59,771 $160,594 $109,

  27. Slide 27: Non-GAAP Reconciliation – Free Cash Flow

    2015 Second Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – Free Cash Flow (in thousands) Trailing Twelve Months Ended 6/30/2015 Cash flows from operating activities $606,052 Less: Purchases of property and equipment (61,215) Additions to licensed computer software from vendors (35,042

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

    2015 Second Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA Trailing Twelve (in thousands) Months Ended 6/30/2015 Net Income $328,714 Adjusted for: Add: Discontinued operations 2,458 Deduct: Equity in Income of Equity Investments (19,860) Add: Income Taxes 15

  29. Slide 29: 2015 Revised Guidance Assumptions

    2015 Second Quarter and YTD Results > APPENDIX: 2015 Revised Guidance Assumptions The revised 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

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