Total System Services — Q4 2010 Earnings Presentation
24 slides from Total System Services's earnings presentation, Jan 25, 2011
Slide 1: 2010 Fourth Quarter and Full-Year Results
2010 Fourth Quarter and Full-Year Results January 25, 2011 ©2011 Total System Services, Inc.® Proprietary. All rights reserved worldwide.
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 subject
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
Slide 4: Phil Tomlinson
Phil Tomlinson Chairman and Chief Executive Officer ©2010 Total System Services, Inc.® Proprietary. All rights reserved worldwide.
Slide 5: Jim Lipham
Jim Lipham Chief Financial Officer ©2010 Total System Services, Inc.® Proprietary. All rights reserved worldwide.
Slide 6: Consolidated Selected Financial Highlights
Consolidated Selected Financial Highlights (in thousands) 4th Qtr 4th Qtr Percent YTD YTD Percent Change 2010 2009 Change 2010 2009 Total Revenues $ 439,991 $ 432,529 1.7% $ 1,717,577 $ 1,677,483 2.4% Revenues Before Reimbursable Items 373,844 360,440 3.7 1,442,436 1,407,305 2.5 Operating Income 70,
Slide 7: Net Acquisition Impact – TSYS Merchant Solutions
Net Acquisition Impact – TSYS Merchant Solutions (in thousands) 4th Qtr YTD 2010 2010 Total Revenues $ 34,942 $ 97,734 Operating profit prior to fees 6,961 18,776 Third-party acquisition fees 272 4,130 Operating Income 6,689 14,646 Income from continuing operations 5,607 12,651 Noncontrolling intere
Slide 8: 2010 YTD Revenue Change
2010 YTD Revenue Change Revenues Before Reimbursable Items 15% Acquisitions Lost Business, 10% Non- recurring 7% Items and Price Compression New Clients (10%) Internal 5% Growth 2% Reported 4% Currency 3% 0% 0% 8 ©2011 Total System Services, Inc.® Proprietary. All rights reserved worldwide.
Slide 9: Account on File Portfolio Summary
Account on File Portfolio Summary (in millions) Dec Dec Year Over Year Sept Sequential 2010 2009 Change Due To: 2010 Change Due To: Purges/ Consumer 179.5 187.8 (8.3) Deconversions 180.2 (0.7) Deconversions Stored Value 55.3 42.0 13.3 Client Adds 51.4 3.9 Client Adds Commercial 49.7 41.1 8.6 Client
Slide 10: 4Q 2010 Year Over Year Segment Financial Highlights – North America Services
4Q 2010 Year Over Year Segment Financial Highlights Key Drivers North America Services • ($10.2 million) revenues associated with deconverted clients or lost business Revenues $234.0 million • Termination fees of $8.4 million Revenues Excluding Reimbursables $198.7 million Operating Income $56.3 mil
Slide 11: 4Q 2010 Year Over Year Segment Financial Highlights – International Services
4Q 2010 Year Over Year Segment Financial Highlights Key Drivers International Services • Negative currency impact on revenues of $0.7 million Revenues $92.2 million • Deconversion fee in 2009 of $8.9M Revenues • Impacted by additional expenses in Brazil Constant currency basis $93.0 million Operatin
Slide 12: 4Q 2010 Year Over Year Segment Financial Highlights – Merchant Services
4Q 2010 Year Over Year Segment Financial Highlights Key Drivers Merchant Services • Internal growth improved to 8.4% • Acquisition of controlling interest in TSYS Revenues $122.5 million Merchant Solutions • Operating margin excluding reimbursable items Revenues Excluding Reimbursables and TMS was 3
Slide 13: 4Q 2010 Year Over Year Segment Financial Highlights – Corporate Administration
4Q 2010 Year Over Year Segment Financial Highlights Key Drivers Corporate Administration • Contains costs associated with corporate administrative functions Operating Expenses – Executive, finance, legal, human resources $22.6 million – Mergers & acquisitions • Increased $4.6 million over last year
Slide 14: Cash Flow Strength: 2010 Consolidated Financial Highlights
Cash Flow Strength: 2010 Consolidated Financial Highlights (in millions) $525 $472 $450 $389 $375 $300 $225 $206 $172 $150 $75 $0 EBITDA Cash flow from operations Free cash flow Net income 14 ©2011 Total System Services, Inc.® Proprietary. All rights reserved worldwide.
Slide 15: Cash Balance
Cash Balance (in millions) Operating $1,000 Activities CAP Ex $389 ($217) Acquisitions $750 ($144) Beginning Dividends Balance ($55) Ending $450 Other Balance $500 $18 $395 (10%) Share TMS Purchase Repurchase 49% ($46) 1/1/11 $250 $0 15 ©2011 Total System Services, Inc.® Proprietary. All rights rese
Slide 16: 2011 Guidance Revenue Change
2011 Guidance Revenue Change Revenues Before Reimbursable Items Currency Acquisitions 15% 0-1% Lost Business, New 2-3% Non- recurring Clients Items and Price 10% Compression (6-10%) 5-8% Guidance 5% Internal Growth 2-3% 3-5% 0% 16 ©2011 Total System Services, Inc.® Proprietary. All rights reserved w
Slide 17: 2011 Guidance
2011 Guidance (in millions except per share data) Range Range Change Percent Change Total Revenues $ 1,748 to $ 1,788 2% to 4% Reimbursable Items 260 to 267 (5) to (3) Revenues Before Reimbursable Items 1,488 to 1,521 3 to 5 Income from Continuing Operations Available to TSYS Common Shareholders 211
Slide 18: Appendix
Appendix ©2011 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 18
Slide 19: Non-GAAP Reconciliation – Revenues Before Reimbursable Items
Appendix Non-GAAP Reconciliation – Revenues Before Reimbursable Items (in thousands) Three Months Ended Twelve Months Ended 12/31/10 12/31/09 12/31/10 12/31/09 $ 439,991 Total Revenues $ 432,529 $ 1,717,577 $ 1,677,483 Reimbursable Items 66,147 72,089 275,141 270,178 Revenues Before Reimbursable Ite
Slide 20: Non-GAAP Reconciliation – Segment Operating Margin Excluding Reimbursable Items
Appendix Non-GAAP Reconciliation – Segment Operating Margin Excluding Reimbursable Items (in thousands) North America International Merchant Three Months Ended Three Months Ended Three Months Ended 12/31/10 12/31/09 12/31/10 12/31/09 12/31/10 12/31/09 $ 56,338 Operating Income (a) $ 71,184 $ 7,429 $
Slide 21: Non-GAAP Reconciliation – Constant Currency
Appendix Non-GAAP Reconciliation – Constant Currency (in thousands) Three Percentage Twelve Months Percentage Months Ended Change Months Ended Change 12/31/10 12/31/09 12/31/10 12/31/09 Consolidated: Constant Currency (1) $ 440,742 $ 432,529 1.9% $ 1,716,576 $ 1,677,483 2.3% Foreign Currency (2) (75
Slide 22: Non-GAAP Reconciliation – EBITDA
Appendix Non-GAAP Reconciliation – EBITDA (in thousands) Twelve Months Ended 12/31/2010 Net Income $ 205,621 Adjusted for: Add: Discontinued Operations 3,246 Deduct: Equity in Income of Equity Investments (7,142) Add: Income Taxes 106,088 Add: Nonoperating expense 1,617 Add: Depreciation and Amortiz
Slide 23: Non-GAAP Reconciliation – Free Cash Flow
Appendix Non-GAAP Reconciliation – Free Cash Flow (in thousands) Twelve Months Ended 12/31/2010 Cash Flows from Operating Activities $ 389,160 Less: Purchase of Property and Equipment (46,547) Additions to Licensed Computer Software from Vendors (69,826) Additions to Internally Developed Computer So
Slide 24: List of Assumptions 2011 Guidance
Appendix List of Assumptions 2011 Guidance • The economy will not worsen during 2011; • there will be no deconversions of large clients during the year; • there will be no significant movement in foreign currency exchange rates related to TSYS’ business during 2011; • TSYS will not incur significant
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