Total System Services Inc

Total System Services — Q3 2015 Earnings Presentation

29 slides from Total System Services's earnings presentation, Oct 27, 2015

  1. Slide 1: 2015 Third Quarter and YTD Results

    2015 Third Quarter and YTD Results October 27, 2015 ©2015 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  2. Slide 2: Forward-Looking Statements

    2015 Third 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 expecta

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

    2015 Third 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 Third Quarter and YTD Results > CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS (in thousands, except per share data) 3rd Qtr 3rd Qtr Percent YTD YTD Percent 2015 2014 Change 2015 2014 Change $707,890 $616,891 14.8% Total Revenues $2,062,698 $1,811,774 13.8% 636,386 552,860 15.1 Revenues Before Reim

  7. Slide 7: 3Q 2015 Consolidated Highlights

    2015 Third Quarter and YTD Results > 3Q 2015 CONSOLIDATED HIGHLIGHTS Revenue by Segment* ➔ Double digit revenue growth ➔ Strong cross segment delivery of performance North America ➔ Record volume gains 22% International ➔ Expanding consolidated margins 45% Merchant 20% NetSpend 13% Consolidated Reve

  8. Slide 8: 3Q 2015 North America Segment Highlights

    2015 Third Quarter and YTD Results > 3Q 2015 NORTH AMERICA SEGMENT HIGHLIGHTS 8 ➔ Revenue Accounts on File 677.5 685.5 YOY Growth % 653.2 － 5th straight quarter record-setting results ➔ Operating income (in millions) － 4th straight quarter record-setting results 541.4 550.0 ➔ Transactions increased

  9. Slide 9: 3Q 2015 International Segment Highlights

    2015 Third Quarter and YTD Results > 3Q 2015 INTERNATIONAL SEGMENT HIGHLIGHTS 9 Accounts on File ➔ Solid constant currency revenue growth trend YOY Growth % 73.9 74.9 ➔ AOF increased 16.9% (in millions) 70.5 ➔ Transactions increased 9.0% 66.6 64.1 ➔ Strong operating margin growth 60.7 62.5 59.1 84%

  10. Slide 10: 3Q 2015 Merchant Segment Highlights

    2015 Third Quarter and YTD Results > 3Q 2015 MERCHANT SEGMENT HIGHLIGHTS Segment Revenue by LOB ➔ Revenue up 7.6% ($ in millions) YOY Growth % ➔ Revenue mix: 60% Direct; 40% Indirect ➔ SBS Sales Volume at $6.4B, up 9% YOY $48 $45 $46 $50 $44 $43 $46 $50 (12%) (14%) (10%) (2%) (9%) (4%) (0%) (1%) ➔ P

  11. Slide 11: 3Q 2015 NetSpend Segment Highlights

    2015 Third Quarter and YTD Results > 3Q 2015 NETSPEND SEGMENT HIGHLIGHTS Gross Dollar Volume ➔ Gross Dollar Volume (GDV) up 22.3% ($ in billions) YOY Growth % $7.7 ➔ Total active cards at 3.6M, up 18.1% ➔ Direct deposit active cards at 1.8M, up 18.1% $6.6 ➔ Signed 3-year distribution agreement with

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

    2015 Third Quarter and YTD Results > SEGMENT OPERATING MARGIN AND CONSOLIDATED ADJUSTED OPERATING MARGIN Three Months Ended September 30, 2015 Adjusted Revenues before (in thousands) Segment Reimbursable Adjusted Operating Income Items Operating Margin North America $113,946 $293,571 38.81% Internat

  13. Slide 13: Segment Operating Margin and Consolidated Adjusted Operating Margin

    2015 Third Quarter and YTD Results > SEGMENT OPERATING MARGIN AND CONSOLIDATED ADJUSTED OPERATING MARGIN Nine Months Ended September 30, 2015 Adjusted Revenues before (in thousands) Segment Reimbursable Adjusted Operating Income Items Operating Margin North America $324,902 $846,989 38.36% Internati

  14. Slide 14: Rollforward of Quarterly Cash Balance

    2015 Third Quarter and YTD Results > ROLLFORWARD OF QUARTERLY CASH BALANCE (in millions) Operating $600 Activities Cap Ex $175 ($40) Debt Pmts Dividends Ending ($16) $500 ($18) Other Balance ($2) $448 Beginning $400 Balance $349 $300 $200 $100 $0 6/30/2015 9/30/2015 ©2015 Total System Services, Inc.

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

    2015 Third Quarter and YTD Results > CASH FLOW STRENGTH: 2015 TTM Consolidated Financial Highlights (in millions) $900 $833 $825 $750 $675 $631 $600 $525 $426 $448 $450 $366 $375 $300 $225 $150 $75 $0 Adjusted EBITDA Cash flow from operations Free cash flow Net income Ending cash (TTM = Trailing Twe

  16. Slide 16: 2015 Revised Guidance

    2015 Third Quarter and YTD Results > 2015 REVISED GUIDANCE* (in millions, except per share data) Range Range Percent Change Total Revenues $2,728 to $2,746 11% to 12% Revenues Before Reimbursable Items $2,463 to $2,473 12% to 13% 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 Third 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 merge

  20. Slide 20: Accounts on File Portfolio Summary

    2015 Third Quarter and YTD Results > APPENDIX: Accounts on File Portfolio Summary (in millions) Sep Sep % Sep Jun % 2015 2014 Change 2015 2015 Change Consumer Credit 373.6 263.9 41.5 373.6 374.1 (0.1) Retail 25.4 28.4 (10.3) 25.4 26.4 (3.5) Total Consumer 399.0 292.3 36.5 399.0 400.5 (0.4) Commercia

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

    2015 Third Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – Revenues Before Reimbursable Items (in thousands) Three Months Ended Nine Months Ended 9/30/15 9/30/14 9/30/15 9/30/14 Total Revenues $707,890 $616,891 $2,062,698 $1,811,774 Reimbursable Items 71,504 64,031 208,444 188,096 Reve

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

    2015 Third Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin Three Months Ended Nine Months Ended (in thousands) 9/30/15 9/30/14 9/30/15 9/30/14 Operating income $163,104 $129,407 $416,202 $308,867 Add: Acquisition intangible amort 2

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

    2015 Third Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – Constant Currency (in thousands) Three Percentage Nine Percentage Months Ended Change Months Ended Change 9/30/15 9/30/14 9/30/15 9/30/14 Consolidated: Constant Currency (1) $716,363 $616,891 16.1% $2,088,418 $1,811,774 15.3% F

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

    2015 Third Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – Constant Currency (in thousands) Three Percentage Nine Percentage Months Ended Change Months Ended Change 9/30/15 9/30/14 9/30/15 9/30/14 Consolidated: Constant Currency (1) $644,364 $552,860 16.6% $1,878,291 $1,623,678 15.7% F

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

    2015 Third Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA (in thousands) Three Months Ended Nine Months Ended Sep Sep Sep Sep 2015 2014 2015 2014 Net income : As reported (GAAP) (a) $122,051 $85,198 $284,325 $248,163 Adjusted for: Deduct: Income from discont

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

    2015 Third Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – Adjusted EPS Three Months Ended Nine Months Ended Sep Sep Sep Sep (in thousands) 2015 2014 2015 2014 Income from continuing operations available to TSYS Common Shareholders: As reported (GAAP) (a) $120,622 $82,925 $281,216 $192

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

    2015 Third Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – Free Cash Flow (in thousands) Trailing Twelve Months Ended 9/30/2015 Cash flows from operating activities $630,640 Less: Purchases of property and equipment (57,062) Additions to licensed computer software from vendors (32,192)

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

    2015 Third Quarter and YTD Results > APPENDIX: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA Trailing Twelve (in thousands) Months Ended 9/30/2015 Net Income $365,567 Adjusted for: Add: Discontinued operations 3,338 Deduct: Equity in Income of Equity Investments (21,061) Add: Income Taxes 154

  29. Slide 29: 2015 Revised Guidance Assumptions

    2015 Third 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 n

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