Form 8-K TOTAL SYSTEM SERVICES For: Jan 27
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
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CURRENT REPORT
Pursuant to Section�13 or 15(d) of
the Securities Exchange Act of 1934
January�27, 2015
Date of Report (Date of Earliest Event Reported)
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Total System Services, Inc.
(Exact Name of Registrant as Specified in its Charter)
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| Georgia | � | 1-10254 | � | 58-1493818 |
| (State of Incorporation) | � | (Commission File Number) | � | (IRS Employer Identification No.) |
One TSYS Way, Columbus, Georgia 31901
(Address of principal executive offices) (Zip Code)
(706) 649-2310
(Registrant�s telephone number, including area code)
(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| � | � | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| � | � | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| � | � | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| � | � | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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| Item�2.02 | Results of Operations and Financial Condition. |
On January 27, 2015, Total System Services, Inc. (�Registrant�) issued a press release announcing financial results for the full year and fourth quarter ended December 31, 2014. The press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information in the press release shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference into any document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934 except as shall be expressly set forth by specific reference in such filing.
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| Item�7.01 | Regulation FD Disclosure. |
On January 27, 2015, Registrant will hold an investor conference call and webcast to discuss its financial results for the full year and fourth quarter ended December 31, 2014. A copy of the presentation to be used during the conference call is attached hereto as Exhibit 99.2 and incorporated herein by reference. The information in the presentation shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference into any document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934 except as shall be expressly set forth by specific reference in such filing.
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| Item�8.01 | Other Events. |
On January 27, 2015, Registrant announced that its Board of Directors has approved a new share repurchase plan that authorizes the repurchase of up to 20 million shares of Registrant�s stock, which replaces its existing share repurchase plan. The shares may be repurchased from time to time in the open market or in privately negotiated transactions at prices TSYS deems appropriate, subject to market conditions, business opportunities and other factors. This authorization has no expiration date and may be suspended or terminated at any time.
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| Item�9.01 | Financial Statements and Exhibits. |
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| � | (d) | Exhibits |
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| Exhibit�No. | �� | Description |
| 99.1 | �� | Registrant�s press release dated January 27, 2015 |
| 99.2 | �� | Registrant�s presentation dated January 27, 2015 |
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| TOTAL SYSTEM SERVICES, INC. (�Registrant�) | ||||||
| Dated: January�27, 2015 | By: | /s/ Kathleen Moates | ||||
| Kathleen Moates | ||||||
| Senior Deputy General Counsel | ||||||
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Exhibit 99.1
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| Total System Services, Inc. One TSYS Way P.O. Box 2567 Columbus, GA 31902-2567 |
�� | +1.706.649.2307 +1.706.649.5740 www.tsys.com |
For immediate release:
Contacts:
Shawn Roberts
TSYS Investor Relations
+1.706.644.6081
TSYS Reports 2014�s Fourth Quarter Adjusted EPS Grew 20.8%
And The Full Year Grew 13.2%
Provides 2015 Adjusted EPS Guidance Growth of 11-13%
COLUMBUS, Ga., Jan. 27, 2015 � TSYS (NYSE: TSS) today reported results for the fourth quarter and full year of 2014.
�We finished 2014 on a high note. Organic revenue grew 5.8%, year over year, with total revenues growing 18.5% and revenues before reimbursable items up 20.2%,� said M. Troy Woods, president and chief executive officer of TSYS.
Highlights for the fourth quarter of 2014 include:
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| � | � | � | Adjusted earnings per share (EPS) from continuing operations were $0.58, an increase of 20.8%. On a GAAP basis, basic EPS from continuing operations were $0.45, an increase of 28.8%. |
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| � | � | � | Income from continuing operations attributable to TSYS� shareholders was $83.2 million, an increase of 25.9%. |
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| � | � | � | Adjusted EBITDA was $193.7 million, an increase of 7.0%. |
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| � | � | � | Total revenues for the quarter were $635.1 million, an increase of 8.9%. Revenues before reimbursable items were $569.3 million, an increase of 8.4%. |
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| � | � | � | Adjusted operating margin was 27.2%. GAAP operating margin was 19.3%. |
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| � | � | � | TSYS repurchased 1.5�million shares during the quarter. |
Highlights for the full year 2014 results include:
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| � | � | � | Adjusted EPS from continuing operations were $1.96, an increase of 13.2%. On a GAAP basis, basic EPS from continuing operations were $1.48, an increase of 12.8%. |
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| � | � | � | Income from continuing operations attributable to TSYS� shareholders was $275.2 million, an increase of 11.5%. |
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TSYS Reports 2014�s Fourth Quarter Adjusted EPS Grew 20.8%
And The Full Year Grew 13.2%
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| � | � | � | Adjusted EBITDA was $712.3 million, an increase of 14.1%. |
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| � | � | � | Total revenues were $2.4 billion, an increase of 18.5%. Revenues before reimbursable items were $2.2 billion, an increase of 20.2%. |
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| � | � | � | Adjusted operating margin was 25.7%. GAAP operating margin was 17.6%. |
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| � | � | � | TSYS repurchased 5.2�million shares for the year. |
�With the purchase of 5.2�million shares of our stock during the year and our annual dividend of $0.40 per share, we deployed over 94% of available free cash flow to our shareholders in 2014. Including our purchase of 3.1�million shares in December of 2013, we repurchased 8.3�million shares of our stock deploying $262.9 million of capital during that 13 month period,� said Woods.
TSYS also announced that its Board of Directors has approved a new share repurchase plan that authorizes the repurchase of up to 20�million shares of TSYS stock, which replaces its existing share repurchase plan. The shares may be repurchased from time to time in the open market or in privately negotiated transactions at prices TSYS deems appropriate, subject to market conditions, business opportunities and other factors. This authorization has no expiration date and may be suspended or terminated at any time.
2015 Financial Outlook
�Our guidance for 2015 is included in the table below and we expect another year of strong growth in revenues and adjusted EPS. The results for 2014 and our guidance for 2015 reflect our focus on diversification, growth and the exceptional performance of our TSYS team,� said Woods.
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| � | �� | 2015 Financial Outlook | � | |||||||||||||||||||||
| � | �� | Range (in millions, except per share amounts) |
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| 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 | %� |
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| * | Average Basic Weighted Shares 186 |
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TSYS Reports 2014�s Fourth Quarter Adjusted EPS Grew 20.8%
And The Full Year Grew 13.2%
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Conference Call
TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, January�27. The conference call can be accessed via simultaneous Internet broadcast at tsys.com by clicking on the link under �Webcasts� on the main homepage. The replay will be archived for 12 months and will be available approximately 30 minutes after the completion of the call. A slide presentation to accompany the call will be available by clicking on the link under �Webcasts� on the main homepage of tsys.com.
Non-GAAP Measures
This press release contains information prepared in conformity with GAAP as well as non-GAAP information. It is management�s intent to provide non-GAAP financial information to enhance understanding of its consolidated financial information as prepared in accordance with GAAP. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure and the most directly comparable GAAP financial measure are presented so as not to imply that more emphasis should be placed on the non-GAAP measure. The non-GAAP financial information presented may be determined or calculated differently by other companies.
Additional information about non-GAAP financial measures, including, but not limited to, adjusted EBITDA and adjusted EPS, and a reconciliation of those measures to the most directly comparable GAAP measures are included on pages 13 to 16 of this release.
About TSYS
At TSYS� (NYSE: TSS), we believe payments should revolve around people, not the other way around. We call this belief �People-Centered Payments�.� By putting people at the center of every decision we make, TSYS supports financial institutions, businesses and governments in more than 80 countries. Through NetSpend�, A TSYS Company, we empower consumers with the convenience, security, and freedom to be self-banked. TSYS offers issuer services and merchant payment acceptance for credit, debit, prepaid, healthcare and business solutions.
TSYS� headquarters are located in Columbus, Ga., U.S.A., with local offices spread across the Americas, EMEA and Asia-Pacific. TSYS is a member of The Civic 50 and was named one of the 2013 World�s Most Ethical Companies by Ethisphere magazine. TSYS routinely posts all important information on its website. For more, please visit us at www.tsys.com.
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TSYS Reports 2014�s Fourth Quarter Adjusted EPS Grew 20.8%
And The Full Year Grew 13.2%
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Forward-Looking Statements
This press release contains �forward-looking statements� � that is, statements related to future, not past, events. Forward-looking statements often address our expected future business and financial performance and often contain words such as �expect,� �anticipate,� �intend,� �believe,� �should,� �plan,� �potential,� �will,� �could,� and similar expressions. These forward-looking statements include, among others, statements regarding TSYS� expectation that it will have another year of strong growth in revenues and adjusted EPS and its earnings guidance for 2015 total revenues, revenues before reimbursable items and adjusted EPS, and the assumptions underlying such statements. These statements are based on the current beliefs and expectations of TSYS� management, are based on management�s assumptions and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements. A number of important factors could cause actual results or events to differ materially from those contemplated by our forward-looking statements in this press release. Many of these factors are beyond TSYS� ability to control or predict. These factors include, but are not limited to, the material breach of security of any of TSYS� systems; TSYS� ability to integrate acquisitions and achieve the anticipated growth opportunities and other benefits of the acquisitions; the effect of current domestic and worldwide economic conditions; risks associated with foreign operations, including adverse developments with respect to foreign currency exchange rates; expenses are incurred associated with the signing of a significant client; TSYS does not convert clients� portfolios as scheduled; the deconversion of a significant client; changes occur in laws, rules, regulations, credit card association rules, prepaid industry rules or other industry standards affecting TSYS and our clients that may result in costly new compliance burdens on TSYS and our clients and lead to a decrease in the volume and/or number of transactions processed or limit the types and amounts of fees that can be charged to customers; the costs and effects of litigation, investigations or similar matters or adverse facts and developments relating thereto; adverse developments with respect to the payment card industry in general, including a decline in the use of cards as a payment mechanism; and growth rates of TSYS� existing clients are lower than anticipated or attrition rates of existing clients are higher than anticipated. Additional risks and other factors that could cause actual results or events to differ materially from those contemplated in this release can be found in TSYS� filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise.
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TSYS Announces Fourth Quarter 2014 Earnings
Page 5 of 16
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TSYS
Financial Highlights
(unaudited)
(in thousands, except per share data)
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| � | �� | Three Months Ended | � | � | Twelve Months Ended | � | ||||||||||||||||||
| � | �� | December 31, | � | � | December 31, | � | ||||||||||||||||||
| � | �� | � | � | � | � | � | � | Percent | � | � | � | � | � | � | � | � | Percent | � | ||||||
| � | �� | 2014 | � | � | 2013 | � | � | Change | � | � | 2014 | � | � | 2013 | � | � | Change | � | ||||||
| Total revenues |
�� | $ | 635,104 | �� | � | � | 583,103 | �� | � | � | 8.9� | %� | � | $ | 2,446,877 | �� | � | � | 2,064,305 | �� | � | � | 18.5� | %� |
| Cost of services |
�� | � | 422,129 | �� | � | � | 386,295 | �� | � | � | 9.3 | �� | � | � | 1,668,892 | �� | � | � | 1,369,438 | �� | � | � | 21.9 | �� |
| Selling, general and administrative expenses |
�� | � | 90,199 | �� | � | � | 85,739 | �� | � | � | 5.2 | �� | � | � | 343,128 | �� | � | � | 298,147 | �� | � | � | 15.1 | �� |
| Merger and acquisition expenses |
�� | � | 3 | �� | � | � | 2,211 | �� | � | � | (99.9 | )� | � | � | 3,217 | �� | � | � | 14,220 | �� | � | � | (77.4 | )� |
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| Operating income |
� | 122,773 | �� | � | 108,858 | �� | � | 12.8 | �� | � | 431,640 | �� | � | 382,500 | �� | � | 12.8 | �� | ||||||
| Nonoperating income (expenses) |
� | 968 | �� | � | (718 | )� | � | nm | �� | � | (763 | )� | � | (804 | )� | � | 5.1 | �� | ||||||
| Merger and acquisition expenses�bridge loan facility�& other financing |
� | (9,484 | )� | � | (9,754 | )� | � | 2.8 | �� | � | (37,948 | )� | � | (29,220 | )� | � | (29.9 | )� | ||||||
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| Income before income taxes, noncontrolling interests and equity in income of equity investments |
� | 114,257 | �� | � | 98,386 | �� | � | 16.1 | �� | � | 392,929 | �� | � | 352,476 | �� | � | 11.5 | �� | ||||||
| Income taxes |
� | 35,428 | �� | � | 33,435 | �� | � | 6.0 | �� | � | 129,761 | �� | � | 110,981 | �� | � | 16.9 | �� | ||||||
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| Income before noncontrolling interests and equity in income of equity investments |
� | 78,829 | �� | � | 64,951 | �� | � | 21.4 | �� | � | 263,168 | �� | � | 241,495 | �� | � | 9.0 | �� | ||||||
| Equity in income of equity investments, net of tax |
� | 5,751 | �� | � | 3,691 | �� | � | 55.8 | �� | � | 17,583 | �� | � | 13,047 | �� | � | 34.8 | �� | ||||||
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| Income from continuing operations, net of tax |
� | 84,580 | �� | � | 68,642 | �� | � | 23.2 | �� | � | 280,751 | �� | � | 254,542 | �� | � | 10.3 | �� | ||||||
| (Loss) Gain from discontinued operations, net of tax |
� | (3,338 | )� | � | 751 | �� | � | nm | �� | � | 48,655 | �� | � | 2,055 | �� | � | nm | �� | ||||||
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| Net income |
� | 81,242 | �� | � | 69,393 | �� | � | 17.1 | �� | � | 329,406 | �� | � | 256,597 | �� | � | 28.4 | �� | ||||||
| Net income attributable to noncontrolling interests |
� | (1,382 | )� | � | (3,738 | )� | � | 63.0 | �� | � | (6,534 | )� | � | (11,847 | )� | � | 44.8 | �� | ||||||
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| Net income attributable to TSYS common shareholders |
$ | 79,860 | �� | � | 65,655 | �� | � | 21.6� | %� | $ | 322,872 | �� | � | 244,750 | �� | � | 31.9� | %� | ||||||
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| Basic earnings per share(EPS): |
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| Income from continuing operations to TSYS common shareholders* |
$ | 0.45 | �� | � | 0.35 | �� | � | 28.8� | %� | $ | 1.48 | �� | � | 1.31 | �� | � | 12.8� | %� | ||||||
| (Loss) Gain from discontinued operations to TSYS common shareholders* |
� | (0.02 | )� | � | (0.00 | )� | � | nm | �� | � | 0.26 | �� | � | (0.01 | )� | � | nm | �� | ||||||
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| Basic EPS |
$ | 0.43 | �� | � | 0.35 | �� | � | 24.4� | %� | $ | 1.73 | �� | � | 1.30 | �� | � | 33.5� | %� | ||||||
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| Diluted EPS |
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| Income from continuing operations to TSYS common shareholders* |
$ | 0.44 | �� | � | 0.34 | �� | � | 28.9� | %� | $ | 1.46 | �� | � | 1.30 | �� | � | 12.4� | %� | ||||||
| (Loss) Gain from discontinued operations to TSYS common shareholders* |
� | (0.02 | )� | � | (0.00 | )� | � | nm | �� | � | 0.25 | �� | � | (0.01 | )� | � | nm | �� | ||||||
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| Diluted EPS |
$ | 0.43 | �� | � | 0.34 | �� | � | 24.5� | %� | $ | 1.71 | �� | � | 1.29 | �� | � | 33.0� | %� | ||||||
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| Dividends declared per share |
$ | 0.10 | �� | � | 0.10 | �� | $ | 0.40 | �� | � | 0.40 | �� | ||||||||||||
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| Amounts attributable to TSYS common shareholders: |
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| Income from continuing operations, net of tax |
$ | 83,198 | �� | � | 66,058 | �� | � | 25.9� | %� | $ | 275,216 | �� | � | 246,893 | �� | � | 11.5� | %� | ||||||
| (Loss) Gain from discontinued operations, net of tax |
� | (3,338 | )� | � | (403 | )� | � | nm | �� | � | 47,656 | �� | � | (2,143 | )� | � | nm | �� | ||||||
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| Net income |
$ | 79,860 | �� | � | 65,655 | �� | � | 21.6� | %� | $ | 322,872 | �� | � | 244,750 | �� | � | 31.9� | %� | ||||||
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| Non-GAAP measures: |
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| Adjusted EPS from continuing operations |
$ | 0.58 | �� | � | 0.48 | �� | � | 20.8� | %� | $ | 1.96 | �� | � | 1.73 | �� | � | 13.2� | %� | ||||||
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| Adjusted EBITDA |
$ | 193,738 | �� | � | 181,097 | �� | � | 7.0� | %� | $ | 712,267 | �� | � | 624,093 | �� | � | 14.1� | %� | ||||||
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nm = not meaningful
| * | EPS amounts may not total due to rounding. |
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TSYS Announces Fourth Quarter 2014 Earnings
Page 6 of 16
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TSYS
Consolidated Statements of Comprehensive Income
(unaudited)
(in thousands)
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| � | �� | Three Months Ended December�31, |
� | �� | Twelve Months Ended December�31, |
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| � | �� | 2014 | � | � | 2013 | � | �� | 2014 | � | � | 2013 | � | ||||
| Net income |
�� | $ | 81,242 | �� | � | � | 69,393 | �� | �� | $ | 329,406 | �� | � | � | 256,597 | �� |
| Other comprehensive income (loss), net of tax: |
�� | � | �� | � | ||||||||||||
| Foreign currency translation adjustment as a result of discontinued operations |
�� | � | ��� | �� | � | � | ��� | �� | �� | � | 3,514 | �� | � | � | ��� | �� |
| Foreign currency translation adjustments |
�� | � | (13,410 | )� | � | � | 2,407 | �� | �� | � | (19,531 | )� | � | � | (4,081 | )� |
| Postretirement healthcare plan adjustments |
�� | � | 147 | �� | � | � | 473 | �� | �� | � | (668 | )� | � | � | 1,895 | �� |
| Unrealized (loss) gain on available-for-sale securities |
�� | � | (28 | )� | � | � | 294 | �� | �� | � | 589 | �� | � | � | 1,773 | �� |
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� | |
| Other comprehensive income (loss) |
�� | � | (13,291 | )� | � | � | 3,174 | �� | �� | � | (16,096 | )� | � | � | (413 | )� |
| �� | � |
� |
� | � | � |
� |
� | �� | � |
� |
� | � | � |
� |
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| Comprehensive income |
�� | � | 67,951 | �� | � | � | 72,567 | �� | �� | � | 313,310 | �� | � | � | 256,184 | �� |
| Comprehensive income attributable to noncontrolling interests |
�� | � | 1,063 | �� | � | � | 2,943 | �� | �� | � | 6,113 | �� | � | � | 9,092 | �� |
| �� | � |
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� |
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� |
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| Comprehensive income attributable to TSYS common shareholders |
�� | $ | 66,888 | �� | � | � | 69,624 | �� | �� | $ | 307,197 | �� | � | � | 247,092 | �� |
| �� | � |
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�
- more -
TSYS Announces Fourth Quarter 2014 Earnings
Page 7 of 16
�
TSYS
Earnings Per Share
(unaudited)
(in thousands, except per share data)
�
| � | � | Three Months Ended | � | � | Three Months Ended | � | � | Twelve Months Ended | � | � | Twelve Months Ended | � | ||||||||||||||||||||
| � | � | December�31, 2014 | � | � | December�31, 2013 | � | � | December�31, 2014 | � | � | December�31, 2013 | � | ||||||||||||||||||||
| � | � | Common | � | � | Participating | � | � | Common | � | � | Participating | � | � | Common | � | � | Participating | � | � | Common | � | � | Participating | � | ||||||||
| � | � | Stock | � | � | Securities | � | � | Stock | � | � | Securities | � | � | Stock | � | � | Securities | � | � | Stock | � | � | Securities | � | ||||||||
| Basic earnings per share: |
� | � | � | � | � | � | � | � | ||||||||||||||||||||||||
| Net income attributable to TSYS common shareholders |
� | $ | 79,860 | �� | � | � | � | 65,655 | �� | � | � | $ | 322,872 | �� | � | � | � | 244,750 | �� | � | ||||||||||||
| Less income allocated to nonvested awards |
� | � | (831 | )� | � | � | 831 | �� | � | � | (643 | )� | � | � | 643 | �� | � | � | (3,308 | )� | � | � | 3,308 | �� | � | � | (1,595 | )� | � | � | 1,595 | �� |
| � | � |
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| Net income allocated to common stock for EPS�calculation�(a) |
� | � | � | � | � | � | � | � | ||||||||||||||||||||||||
| � | $ | 79,029 | �� | � | � | 831 | �� | � | � | 65,012 | �� | � | � | 643 | �� | � | $ | 319,564 | �� | � | � | 3,308 | �� | � | � | 243,155 | �� | � | � | 1,595 | �� | |
| � | � |
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� | � | � |
� |
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| Average common shares outstanding�(b) |
� | � | 183,276 | �� | � | � | 1,945 | �� | � | � | 187,572 | �� | � | � | 1,874 | �� | � | � | 184,297 | �� | � | � | 1,925 | �� | � | � | 187,145 | �� | � | � | 1,246 | �� |
| � | � |
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� |
� | � | � |
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� |
� | � | � |
� |
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| Average common shares and participating securities |
� | � | 185,221 | �� | � | � | � | 189,446 | �� | � | � | � | 186,222 | �� | � | � | � | 188,391 | �� | � | ||||||||||||
| � | � |
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� |
� | � | � | � |
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� | � | � | � |
� |
� | � | |||||||||||||
| Basic earnings per share�(a)/(b) |
� | $ | 0.43 | �� | � | � | 0.43 | �� | � | � | 0.35 | �� | � | � | 0.34 | �� | � | $ | 1.73 | �� | � | � | 1.72 | �� | � | � | 1.30 | �� | � | � | 1.28 | �� |
| � | � |
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| Diluted earnings per share: |
� | � | � | � | � | � | � | � | ||||||||||||||||||||||||
| Net income attributable to TSYS common shareholders |
� | $ | 79,860 | �� | � | � | � | 65,655 | �� | � | � | $ | 322,872 | �� | � | � | � | 244,750 | �� | � | ||||||||||||
| Less income allocated to nonvested awards |
� | � | (824 | )� | � | � | 824 | �� | � | � | (638 | )� | � | � | 638 | �� | � | � | (3,278 | )� | � | � | 3,278 | �� | � | � | (1,585 | )� | � | � | 1,585 | �� |
| � | � |
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| Net income allocated to common stock for EPS�calculation�(c) |
� | � | � | � | � | � | � | � | ||||||||||||||||||||||||
| � | $ | 79,036 | �� | � | � | 824 | �� | � | � | 65,017 | �� | � | � | 638 | �� | � | $ | 319,594 | �� | � | � | 3,278 | �� | � | � | 243,165 | �� | � | � | 1,585 | �� | |
| � | � |
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| Average common shares outstanding |
� | � | 183,276 | �� | � | � | 1,945 | �� | � | � | 187,572 | �� | � | � | 1,874 | �� | � | � | 184,297 | �� | � | � | 1,925 | �� | � | � | 187,145 | �� | � | � | 1,246 | �� |
| Increase due to assumed issuance of shares related to common equivalent shares outstanding |
� | � | 1,964 | �� | � | � | � | 2,176 | �� | � | � | � | 2,205 | �� | � | � | � | 1,648 | �� | � | ||||||||||||
| � | � |
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| Average common and common equivalent shares outstanding (d) |
� | � | 185,240 | �� | � | � | 1,945 | �� | � | � | 189,748 | �� | � | � | 1,874 | �� | � | � | 186,502 | �� | � | � | 1,925 | �� | � | � | 188,793 | �� | � | � | 1,246 | �� |
| � | � |
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| Average common and common equivalent shares and participating securities |
� | � | 187,185 | �� | � | � | � | 191,622 | �� | � | � | � | 188,427 | �� | � | � | � | 190,039 | �� | � | ||||||||||||
| � | � |
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| Diluted earnings per share�(c)/(d) |
� | $ | 0.43 | �� | � | � | 0.42 | �� | � | � | 0.34 | �� | � | � | 0.34 | �� | � | $ | 1.71 | �� | � | � | 1.70 | �� | � | � | 1.29 | �� | � | � | 1.27 | �� |
| � | � |
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�
- more -
TSYS Announces Fourth Quarter 2014 Earnings
Page 8 of 16
�
TSYS
Segment Breakdown
(unaudited)
(in thousands)
�
| � | �� | Three Months Ended December�31, | � | � | Twelve Months Ended December�31, | � | ||||||||||||||||||||||||||
| � | �� | � | � | � | � | � | � | Change | � | � | � | � | � | � | � | � | Change | � | ||||||||||||||
| � | �� | 2014 | � | � | 2013 | � | � | $ | � | � | % | � | � | 2014 | � | � | 2013 | � | � | $ | � | � | % | � | ||||||||
| Revenues before reimbursable items: |
�� | � | � | � | � | � | � | � | ||||||||||||||||||||||||
| North America Services |
�� | $ | 255,539 | �� | � | � | 223,266 | �� | � | � | 32,273 | �� | � | � | 14.5� | %� | � | $ | 954,082 | �� | � | � | 860,645 | �� | � | � | 93,437 | �� | � | � | 10.9� | %� |
| International Services |
�� | � | 92,895 | �� | � | � | 90,595 | �� | � | � | 2,300 | �� | � | � | 2.5 | �� | � | � | 341,785 | �� | � | � | 321,484 | �� | � | � | 20,301 | �� | � | � | 6.3 | �� |
| Merchant Services |
�� | � | 107,677 | �� | � | � | 110,375 | �� | � | � | (2,698 | )� | � | � | (2.4 | )� | � | � | 435,649 | �� | � | � | 446,277 | �� | � | � | (10,628 | )� | � | � | (2.4 | )� |
| NetSpend |
�� | � | 119,165 | �� | � | � | 104,144 | �� | � | � | 15,021 | �� | � | � | 14.4 | �� | � | � | 482,686 | �� | � | � | 207,851 | �� | � | � | 274,835 | �� | � | � | nm | �� |
| Intersegment revenues |
�� | � | (5,975 | )� | � | � | (3,121 | )� | � | � | (2,854 | )� | � | � | (91.4 | )� | � | � | (21,224 | )� | � | � | (12,549 | )� | � | � | (8,675 | )� | � | � | (69.1 | )� |
| �� | � |
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| Revenues before reimbursable items from external customers |
�� | $ | 569,301 | �� | � | � | 525,259 | �� | � | � | 44,042 | �� | � | � | 8.4� | %� | � | $ | 2,192,978 | �� | � | � | 1,823,708 | �� | � | � | 369,270 | �� | � | � | 20.2� | %� |
| �� | � |
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| Total revenues: |
�� | � | � | � | � | � | � | � | ||||||||||||||||||||||||
| North America Services |
�� | $ | 299,429 | �� | � | � | 259,067 | �� | � | � | 40,362 | �� | � | � | 15.6� | %� | � | $ | 1,117,764 | �� | � | � | 1,000,073 | �� | � | � | 117,691 | �� | � | � | 11.8� | %� |
| International Services |
�� | � | 98,650 | �� | � | � | 96,129 | �� | � | � | 2,521 | �� | � | � | 2.6 | �� | � | � | 363,359 | �� | � | � | 341,549 | �� | � | � | 21,810 | �� | � | � | 6.4 | �� |
| Merchant Services |
�� | � | 125,296 | �� | � | � | 128,075 | �� | � | � | (2,779 | )� | � | � | (2.2 | )� | � | � | 510,120 | �� | � | � | 533,050 | �� | � | � | (22,930 | )� | � | � | (4.3 | )� |
| NetSpend |
�� | � | 119,165 | �� | � | � | 104,144 | �� | � | � | 15,021 | �� | � | � | 14.4 | �� | � | � | 482,686 | �� | � | � | 207,851 | �� | � | � | 274,835 | �� | � | � | nm | �� |
| Intersegment revenues |
�� | � | (7,436 | )� | � | � | (4,312 | )� | � | � | (3,124 | )� | � | � | (72.4 | )� | � | � | (27,052 | )� | � | � | (18,218 | )� | � | � | (8,834 | )� | � | � | (48.5 | )� |
| �� | � |
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� |
� | � | � |
� |
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| Revenues from external customers |
�� | $ | 635,104 | �� | � | � | 583,103 | �� | � | � | 52,001 | �� | � | � | 8.9� | %� | � | $ | 2,446,877 | �� | � | � | 2,064,305 | �� | � | � | 382,572 | �� | � | � | 18.5� | %� |
| �� | � |
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| Depreciation and amortization: |
�� | � | � | � | � | � | � | � | ||||||||||||||||||||||||
| North America Services |
�� | $ | 23,136 | �� | � | � | 19,420 | �� | � | � | 3,716 | �� | � | � | 19.1� | %� | � | $ | 86,513 | �� | � | � | 74,480 | �� | � | � | 12,033 | �� | � | � | 16.2� | %� |
| International Services |
�� | � | 9,733 | �� | � | � | 11,974 | �� | � | � | (2,241 | )� | � | � | (18.7 | )� | � | � | 38,909 | �� | � | � | 41,708 | �� | � | � | (2,799 | )� | � | � | (6.7 | )� |
| Merchant Services |
�� | � | 3,980 | �� | � | � | 3,004 | �� | � | � | 976 | �� | � | � | 32.5 | �� | � | � | 14,571 | �� | � | � | 12,034 | �� | � | � | 2,537 | �� | � | � | 21.1 | �� |
| NetSpend |
�� | � | 1,730 | �� | � | � | 1,651 | �� | � | � | 79 | �� | � | � | 4.8 | �� | � | � | 7,509 | �� | � | � | 3,121 | �� | � | � | 4,388 | �� | � | � | nm | �� |
| �� | � |
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� | � | � |
� |
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| Segment depreciation and amortization |
�� | � | 38,579 | �� | � | � | 36,049 | �� | � | � | 2,530 | �� | � | � | 7.0 | �� | � | � | 147,502 | �� | � | � | 131,343 | �� | � | � | 16,159 | �� | � | � | 12.3 | �� |
| Acquisition intangible amortization |
�� | � | 24,166 | �� | � | � | 24,751 | �� | � | � | (585 | )� | � | � | (2.4 | )� | � | � | 96,971 | �� | � | � | 65,893 | �� | � | � | 31,078 | �� | � | � | 47.2 | �� |
| Corporate admin and other |
�� | � | 446 | �� | � | � | 468 | �� | � | � | (22 | )� | � | � | (4.7 | )� | � | � | 2,147 | �� | � | � | 1,790 | �� | � | � | 357 | �� | � | � | 19.9 | �� |
| �� | � |
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� | � | � |
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� |
� | � | � | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | |||||||
| Total depreciation and amortization |
�� | $ | 63,191 | �� | � | � | 61,268 | �� | � | � | 1,923 | �� | � | � | 3.1� | %� | � | $ | 246,620 | �� | � | � | 199,026 | �� | � | � | 47,594 | �� | � | � | 23.9� | %� |
| �� | � |
� |
� | � | � |
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� | � | � | � |
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| Adjusted segment operating income: |
�� | � | � | � | � | � | � | � | ||||||||||||||||||||||||
| North America Services |
�� | $ | 99,620 | �� | � | � | 87,110 | �� | � | � | 12,510 | �� | � | � | 14.4� | %� | � | $ | 351,512 | �� | � | � | 321,619 | �� | � | � | 29,893 | �� | � | � | 9.3� | %� |
| International Services |
�� | � | 22,849 | �� | � | � | 17,986 | �� | � | � | 4,863 | �� | � | � | 27.0 | �� | � | � | 55,123 | �� | � | � | 42,068 | �� | � | � | 13,055 | �� | � | � | 31.0 | �� |
| Merchant Services |
�� | � | 31,399 | �� | � | � | 35,952 | �� | � | � | (4,553 | )� | � | � | (12.7 | )� | � | � | 134,872 | �� | � | � | 155,643 | �� | � | � | (20,771 | )� | � | � | (13.3 | )� |
| NetSpend |
�� | � | 32,742 | �� | � | � | 31,737 | �� | � | � | 1,005 | �� | � | � | 3.2 | �� | � | � | 128,285 | �� | � | � | 66,353 | �� | � | � | 61,932 | �� | � | � | 93.3 | �� |
| �� | � |
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� |
� | � | � | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | |||||||
| Total adjusted segment operating income |
�� | � | 186,610 | �� | � | � | 172,785 | �� | � | � | 13,825 | �� | � | � | 8.0 | �� | � | � | 669,792 | �� | � | � | 585,683 | �� | � | � | 84,109 | �� | � | � | 14.4 | �� |
| Acquisition intangible amorization |
�� | � | (24,166 | )� | � | � | (24,751 | )� | � | � | 585 | �� | � | � | 2.4 | �� | � | � | (96,971 | )� | � | � | (65,893 | )� | � | � | (31,078 | )� | � | � | (47.2 | )� |
| NetSpend M&A operating expenses |
�� | � | (3 | )� | � | � | (2,211 | )� | � | � | 2,208 | �� | � | � | 99.9 | �� | � | � | (3,217 | )� | � | � | (14,220 | )� | � | � | 11,003 | �� | � | � | 77.4 | �� |
| Share-based compensation |
�� | � | (7,771 | )� | � | � | (9,345 | )� | � | � | 1,574 | �� | � | � | 16.8 | �� | � | � | (30,790 | )� | � | � | (28,933 | )� | � | � | (1,857 | )� | � | � | (6.4 | )� |
| Corporate admin and other |
�� | � | (31,897 | )� | � | � | (27,620 | )� | � | � | (4,277 | )� | � | � | (15.5 | )� | � | � | (107,175 | )� | � | � | (94,137 | )� | � | � | (13,038 | )� | � | � | (13.9 | )� |
| �� | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | � | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | |||||||
| Operating income |
�� | $ | 122,773 | �� | � | � | 108,858 | �� | � | � | 13,915 | �� | � | � | 12.8� | %� | � | $ | 431,639 | �� | � | � | 382,500 | �� | � | � | 49,139 | �� | � | � | 12.8� | %� |
| �� | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | � | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | |||||||
| Other: |
�� | � | � | � | � | � | � | � | ||||||||||||||||||||||||
| Reimbursable items: |
�� | � | � | � | � | � | � | � | ||||||||||||||||||||||||
| North America Services |
�� | $ | 43,890 | �� | � | � | 35,801 | �� | � | � | 8,089 | �� | � | � | 22.6� | %� | � | $ | 163,682 | �� | � | � | 139,428 | �� | � | � | 24,254 | �� | � | � | 17.4� | %� |
| International Services |
�� | � | 5,755 | �� | � | � | 5,534 | �� | � | � | 221 | �� | � | � | 4.0 | �� | � | � | 21,574 | �� | � | � | 20,065 | �� | � | � | 1,509 | �� | � | � | 7.5 | �� |
| Merchant Services |
�� | � | 17,619 | �� | � | � | 17,700 | �� | � | � | (81 | )� | � | � | (0.5 | )� | � | � | 74,471 | �� | � | � | 86,773 | �� | � | � | (12,302 | )� | � | � | (14.2 | )� |
| NetSpend |
�� | � | ��� | �� | � | � | ��� | �� | � | � | ��� | �� | � | � | na | �� | � | � | ��� | �� | � | � | ��� | �� | � | � | ��� | �� | � | � | na | �� |
| Intersegment revenues |
�� | � | (1,461 | )� | � | � | (1,191 | )� | � | � | (270 | )� | � | � | (22.7 | )� | � | � | (5,828 | )� | � | � | (5,669 | )� | � | � | (159 | )� | � | � | (2.8 | )� |
| �� | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | � | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | |||||||
| Reimbursable items |
�� | $ | 65,803 | �� | � | � | 57,844 | �� | � | � | 7,959 | �� | � | � | 13.8� | %� | � | $ | 253,899 | �� | � | � | 240,597 | �� | � | � | 13,302 | �� | � | � | 5.5� | %� |
| �� | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | � | � |
� |
� | � | � |
� |
� | � | � |
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�
- more -
TSYS Announces Fourth Quarter 2014 Earnings
Page 9 of 16
�
TSYS
Segment Breakdown
(unaudited)
(in thousands)
�
| Other: | �� | � | � | �� | � | � | �� | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � | ||||||||
| Volumes: | �� | � | � | �� | � | � | �� | � | � | � | � | � | � | At | � | � | Change | � | ||||||||||||||
| FTEs (full-time equivalents) | �� | � | � | �� | � | � | �� | � | � | � | � | � | � | 12/31/2014 | � | � | 12/31/2013 | � | � | # | � | � | % | � | ||||||||
| North America Services |
�� | �� | �� | � | � | � | 4,724 | �� | � | � | 4,484 | �� | � | � | 240 | �� | � | � | 5.4� | %� | ||||||||||||
| International Services |
�� | �� | �� | � | � | � | 2,403 | �� | � | � | 2,412 | �� | � | � | (9 | )� | � | � | (0.4 | )� | ||||||||||||
| Merchant Services |
�� | �� | �� | � | � | � | 1,590 | �� | � | � | 1,598 | �� | � | � | (8 | )� | � | � | (0.5 | )� | ||||||||||||
| NetSpend |
�� | �� | �� | � | � | � | 552 | �� | � | � | 470 | �� | � | � | 82 | �� | � | � | 17.4 | �� | ||||||||||||
| Corporate Admin and Other |
�� | �� | �� | � | � | � | 583 | �� | � | � | 547 | �� | � | � | 36 | �� | � | � | 6.6 | �� | ||||||||||||
| �� | �� | �� | � | � | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | ||||||||||||||||
| FTEs�Continuing Operations |
�� | �� | �� | � | � | � | 9,852 | �� | � | � | 9,511 | �� | � | � | 341 | �� | � | � | 3.6� | %� | ||||||||||||
| Discontinued Operations |
�� | �� | �� | � | � | � | ��� | �� | � | � | 84 | �� | � | � | (84 | )� | � | � | na | �� | ||||||||||||
| �� | �� | �� | � | � | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | ||||||||||||||||
| FTEs |
�� | �� | �� | � | � | � | 9,852 | �� | � | � | 9,595 | �� | � | � | 257 | �� | � | � | 2.7� | %� | ||||||||||||
| �� | �� | �� | � | � | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | ||||||||||||||||
| � | �� | � | � | �� | � | � | �� | � | � | � | � | � | � | At | � | � | Change | � | ||||||||||||||
| Total assets (in thousands) | �� | � | � | �� | � | � | �� | � | � | � | � | � | � | 12/31/2014 | � | � | 12/31/2013 | � | � | $ | � | � | % | � | ||||||||
| North America Services |
�� | �� | �� | � | � | $ | 3,326,730 | �� | � | � | 3,215,333 | �� | � | � | 111,397 | �� | � | � | 3.5� | %� | ||||||||||||
| International Services |
�� | �� | �� | � | � | � | 356,590 | �� | � | � | 417,379 | �� | � | � | (60,789 | )� | � | � | (14.6 | )� | ||||||||||||
| Merchant Services |
�� | �� | �� | � | � | � | 695,744 | �� | � | � | 676,592 | �� | � | � | 19,152 | �� | � | � | 2.8 | �� | ||||||||||||
| NetSpend |
�� | �� | �� | � | � | � | 1,555,273 | �� | � | � | 1,596,150 | �� | � | � | (40,877 | )� | � | � | (2.6 | )� | ||||||||||||
| Intersegment assets |
�� | �� | �� | � | � | � | (2,202,283 | )� | � | � | (2,218,886 | )� | � | � | 16,603 | �� | � | � | 0.7 | �� | ||||||||||||
| �� | �� | �� | � | � | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | ||||||||||||||||
| Total assets |
�� | �� | �� | � | � | $ | 3,732,054 | �� | � | � | 3,686,568 | �� | � | � | 45,486 | �� | � | � | 1.2� | %� | ||||||||||||
| �� | �� | �� | � | � | � |
� |
� | � | � |
� |
� | � | � |
� |
� | � | ||||||||||||||||
| � | �� | Three Months Ended December 31, | � | � | Twelve Months Ended December 31, | � | ||||||||||||||||||||||||||
| � | �� | � | � | �� | � | � | �� | Change | � | � | � | � | � | � | � | � | Change | � | ||||||||||||||
| � | �� | 2014 | � | �� | 2013 | � | �� | Inc(Dec) | � | � | % | � | � | 2014 | � | � | 2013 | � | � | Inc(Dec) | � | � | % | � | ||||||||
| North America Segment: |
�� | �� | �� | � | � | � | � | � | ||||||||||||||||||||||||
| Accounts on File (AOF) (in millions) |
�� | �� | �� | � | � | � | 550.0 | �� | � | � | 481.9 | �� | � | � | 68.2 | �� | � | � | 14.1� | %� | ||||||||||||
| Transactions (in millions) |
�� | � | 2,980.0 | �� | �� | � | 2,488.6 | �� | �� | � | 491.4 | �� | � | � | 19.8� | %� | � | � | 10,838.0 | �� | � | � | 9,132.8 | �� | � | � | 1,705.1 | �� | � | � | 18.7� | %� |
| International Segment: |
�� | �� | �� | � | � | � | � | � | ||||||||||||||||||||||||
| AOF (in millions) |
�� | �� | �� | � | � | � | 66.6 | �� | � | � | 59.1 | �� | � | � | 7.5 | �� | � | � | 12.7� | %� | ||||||||||||
| Transactions (in millions) |
�� | � | 618.1 | �� | �� | � | 555.6 | �� | �� | � | 62.5 | �� | � | � | 11.3� | %� | � | � | 2,268.4 | �� | � | � | 2,007.4 | �� | � | � | 261.0 | �� | � | � | 13.0� | %� |
| Merchant Segment: |
�� | �� | �� | � | � | � | � | � | ||||||||||||||||||||||||
| Point-of-sale Transactions (in millions) |
�� | � | 991.0 | �� | �� | � | 1,034.6 | �� | �� | � | (43.6 | )� | � | � | (4.2 | )%� | � | � | 4,052.7 | �� | � | � | 4,359.8 | �� | � | � | (307.1 | )� | � | � | (7.0 | )%� |
| Dollar sales volume (in millions) |
�� | $ | 12,392.6 | �� | �� | $ | 12,021.0 | �� | �� | � | 371.6 | �� | � | � | 3.1� | %� | � | $ | 46,846.4 | �� | � | $ | 44,144.0 | �� | � | $ | 2,702.4 | �� | � | � | 6.1� | %� |
| NetSpend Segment: |
�� | �� | �� | � | � | � | � | � | ||||||||||||||||||||||||
| Gross Dollar Volume (in millions) |
�� | $ | 4,691.5 | �� | �� | $ | 3,967.6 | �� | �� | $ | 723.9 | �� | � | � | 18.2� | %� | � | $ | 20,296.0 | �� | � | $ | 17,075.1 | �� | � | $ | 3,220.9 | �� | � | � | 18.9� | %� |
| 90-Day Active Cards (in thousands) |
�� | �� | �� | � | � | � | 1,610.2 | �� | � | � | 1,321.1 | �� | � | � | 289.1 | �� | � | � | 21.9� | %� | ||||||||||||
| Direct Deposit 90-Day Active Cards (in thousands) |
�� | �� | �� | � | � | � | 3,215.0 | �� | � | � | 2,835.1 | �� | � | � | 379.9 | �� | � | � | 13.4� | %� | ||||||||||||
| % of 90-Day Active Cards with Direct Deposit |
�� | �� | �� | � | � | � | 50.1 | %� | � | � | 46.6 | %� | � | � | ||||||||||||||||||
�
- more -
TSYS Announces Fourth Quarter 2014 Earnings
Page 10 of 16
�
TSYS
Balance Sheet
(unaudited)
(in thousands)
�
| � | �� | Dec 31, 2014 | � | � | Dec�31,�2013 | � | ||
| Assets |
�� | � | ||||||
| Current assets: |
�� | � | ||||||
| Cash and cash equivalents |
�� | $ | 289,183 | �� | � | � | 247,700 | �� |
| Accounts receivable, net |
�� | � | 283,204 | �� | � | � | 255,773 | �� |
| Deferred income tax assets |
�� | � | 17,095 | �� | � | � | 14,158 | �� |
| Prepaid expenses and other current assets |
�� | � | 95,758 | �� | � | � | 95,109 | �� |
| Current assets of discontinued operations |
�� | � | 4,003 | �� | � | � | 41,193 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| Total current assets |
�� | � | 689,243 | �� | � | � | 653,933 | �� |
| Goodwill |
�� | � | 1,546,300 | �� | � | � | 1,541,574 | �� |
| Other intangible assets, net |
�� | � | 404,107 | �� | � | � | 481,419 | �� |
| Computer software, net |
�� | � | 366,148 | �� | � | � | 363,880 | �� |
| Property and equipment, net |
�� | � | 290,585 | �� | � | � | 259,968 | �� |
| Contract acquisition costs, net |
�� | � | 236,305 | �� | � | � | 184,828 | �� |
| Equity investments, net |
�� | � | 100,468 | �� | � | � | 94,133 | �� |
| Deferred income tax assets, net |
�� | � | 7,882 | �� | � | � | 3,972 | �� |
| Other assets |
�� | � | 91,016 | �� | � | � | 87,146 | �� |
| Long-term assets of discontinued operations |
�� | � | ��� | �� | � | � | 15,715 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| Total assets |
�� | $ | 3,732,054 | �� | � | � | 3,686,568 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| Liabilities |
�� | � | ||||||
| Current liabilities: |
�� | � | ||||||
| Accounts payable |
�� | $ | 48,793 | �� | � | � | 33,651 | �� |
| Current portion of borrowings |
�� | � | 43,784 | �� | � | � | 34,257 | �� |
| Accrued salaries and employee benefits |
�� | � | 38,001 | �� | � | � | 38,339 | �� |
| Current portion of obligations under capital leases |
�� | � | 7,127 | �� | � | � | 22,662 | �� |
| Other current liabilities |
�� | � | 154,805 | �� | � | � | 159,170 | �� |
| Current liabilities of discontinued operations |
�� | � | 4,003 | �� | � | � | 9,136 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| Total current liabilities |
�� | � | 296,513 | �� | � | � | 297,215 | �� |
| Long-term borrowings, excluding current portion |
�� | � | 1,398,132 | �� | � | � | 1,428,251 | �� |
| Deferred income tax liabilities |
�� | � | 205,868 | �� | � | � | 228,727 | �� |
| Obligations under capital leases, excluding current portion |
�� | � | 6,974 | �� | � | � | 7,500 | �� |
| Other long-term liabilities |
�� | � | 98,006 | �� | � | � | 81,600 | �� |
| Long-term liabilities of discontinued operations |
�� | � | ��� | �� | � | � | 1,197 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| Total liabilities |
�� | � | 2,005,493 | �� | � | � | 2,044,490 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| Redeemable noncontrolling interest |
�� | � | 22,492 | �� | � | � | 39,652 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| Equity |
�� | � | ||||||
| Shareholders� equity: |
�� | � | ||||||
| Common stock |
�� | � | 20,278 | �� | � | � | 20,279 | �� |
| Additional paid-in capital |
�� | � | 175,695 | �� | � | � | 165,841 | �� |
| Accumulated other comprehensive income (loss), net |
�� | � | (11,926 | )� | � | � | 3,749 | �� |
| Treasury stock |
�� | � | (453,230 | )� | � | � | (326,996 | )� |
| Retained earnings |
�� | � | 1,966,370 | �� | � | � | 1,718,204 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| Total shareholders� equity |
�� | � | 1,697,187 | �� | � | � | 1,581,077 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| Noncontrolling interests in consolidated subsidiaries |
�� | � | 6,882 | �� | � | � | 21,349 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| Total equity |
�� | � | 1,704,069 | �� | � | � | 1,602,426 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| Total liabilities and equity |
�� | $ | 3,732,054 | �� | � | � | 3,686,568 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
- more -
�
TSYS Announces Fourth Quarter 2014 Earnings
Page 11 of 16
�
TSYS
Cash Flow
(unaudited)
(in thousands)
�
| � | �� | Twelve�Months�Ended�December�31, | � | |||||
| � | �� | 2014 | � | � | 2013 | � | ||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
�� | � | ||||||
| Net income |
�� | $ | 329,406 | �� | � | � | 256,597 | �� |
| Adjustments to reconcile net income to net cash provided by operating activities: |
�� | � | ||||||
| Equity in income of equity investments |
�� | � | (17,583 | )� | � | � | (13,047 | )� |
| Dividends received from equity investments |
�� | � | 9,188 | �� | � | � | 8,595 | �� |
| Loss on foreign currency |
�� | � | 999 | �� | � | � | 1,027 | �� |
| Depreciation and amortization |
�� | � | 248,018 | �� | � | � | 205,351 | �� |
| Amortization of debt issuance costs |
�� | � | 1,817 | �� | � | � | 7,269 | �� |
| Amortization of bond discount |
�� | � | 383 | �� | � | � | 225 | �� |
| Changes in fair value of private equity investments |
�� | � | (793 | )� | � | � | (966 | )� |
| Share-based compensation |
�� | � | 30,790 | �� | � | � | 28,933 | �� |
| Excess tax benefit from share-based compensation |
�� | � | (7,185 | )� | � | � | (3,528 | )� |
| Provisions for bad debt expense and billing adjustments |
�� | � | 2,823 | �� | � | � | 2,000 | �� |
| Charges for transaction processing provisions |
�� | � | 9,468 | �� | � | � | 7,458 | �� |
| Provision for fraud and other losses |
�� | � | 38,381 | �� | � | � | 11,912 | �� |
| Deferred income tax expense (benefit) |
�� | � | (13,274 | )� | � | � | 26,945 | �� |
| Loss on disposal of equipment, net |
�� | � | (293 | )� | � | � | (79 | )� |
| Gain on disposal of subsidiaries |
�� | � | (86,961 | )� | � | � | ��� | �� |
| Changes in operating assets and liabilities: |
�� | � | ||||||
| Accounts receivable |
�� | � | (33,406 | )� | � | � | (8,667 | )� |
| Prepaid expenses, other current assets and other long-term assets |
�� | � | (10,525 | )� | � | � | (571 | )� |
| Accounts payable |
�� | � | 8,765 | �� | � | � | (52,042 | )� |
| Accrued salaries and employee benefits |
�� | � | 414 | �� | � | � | (403 | )� |
| Other current liabilities and other long-term liabilities |
�� | � | 50,661 | �� | � | � | (24,611 | )� |
| �� | � |
� |
� | � | � |
� |
� | |
| Net cash provided by operating activities |
�� | � | 561,093 | �� | � | � | 452,398 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| CASH FLOWS FROM INVESTING ACTIVITIES: |
�� | � | ||||||
| Purchases of property and equipment, net |
�� | � | (75,913 | )� | � | � | (40,598 | )� |
| Additions to licensed computer software from vendors |
�� | � | (29,638 | )� | � | � | (63,635 | )� |
| Additions to internally developed computer software |
�� | � | (41,501 | )� | � | � | (33,600 | )� |
| Proceeds from insurance recovery for loss on disposal |
�� | � | 6,212 | �� | � | � | ��� | �� |
| Proceeds from dispositions, net of expenses paid and cash disposed |
�� | � | 44,979 | �� | � | � | ��� | �� |
| Cash used in acquisitions, net of cash acquired |
�� | � | (38,584 | )� | � | � | (1,314,660 | )� |
| Purchase of private equity investments |
�� | � | (3,291 | )� | � | � | (1,378 | )� |
| Additions to contract acquisition costs |
�� | � | (88,871 | )� | � | � | (55,965 | )� |
| �� | � |
� |
� | � | � |
� |
� | |
| Net cash used in investing activities |
�� | � | (226,607 | )� | � | � | (1,509,836 | )� |
| �� | � |
� |
� | � | � |
� |
� | |
| CASH FLOWS FROM FINANCING ACTIVITIES: |
�� | � | ||||||
| Principal payments on long-term borrowings and capital lease obligations |
�� | � | (69,940 | )� | � | � | (166,805 | )� |
| Proceeds from borrowings of long-term borrowings |
�� | � | 1,396 | �� | � | � | 1,395,661 | �� |
| Proceeds from exercise of stock options |
�� | � | 34,869 | �� | � | � | 40,691 | �� |
| Excess tax benefit from share-based compensation |
�� | � | 7,185 | �� | � | � | 3,528 | �� |
| Repurchase of common stock under plans and tax withholding |
�� | � | (170,515 | )� | � | � | (103,857 | )� |
| Debt issuance costs |
�� | � | ��� | �� | � | � | (13,573 | )� |
| Purchase of noncontrolling interests |
�� | � | (37,500 | )� | � | � | ��� | �� |
| Subsidiary dividends paid to noncontrolling shareholders |
�� | � | (7,172 | )� | � | � | (7,321 | )� |
| Dividends paid on common stock |
�� | � | (74,796 | )� | � | � | (56,510 | )� |
| �� | � |
� |
� | � | � |
� |
� | |
| Net cash (used in) provided by financing activities |
�� | � | (316,473 | )� | � | � | 1,091,814 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| CASH AND CASH EQUIVALENTS: |
�� | � | ||||||
| Effect of exchange rate changes on cash and cash equivalents |
�� | � | (7,060 | )� | � | � | (3,758 | )� |
| �� | � |
� |
� | � | � |
� |
� | |
| Net increase in cash and cash equivalents |
�� | � | 10,953 | �� | � | � | 30,618 | �� |
| Cash and cash equivalents at beginning of period |
�� | � | 278,230 | �� | � | � | 247,612 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
| Cash and cash equivalents at end of period |
�� | � | 289,183 | �� | � | � | 278,230 | �� |
| Less cash and cash equivalents of discontinued operations at end of period |
�� | � | ��� | �� | � | � | (30,530 | )� |
| �� | � |
� |
� | � | � |
� |
� | |
| Cash and cash equivalents of continuing operations at end of period |
�� | $ | 289,183 | �� | � | � | 247,700 | �� |
| �� | � |
� |
� | � | � |
� |
� | |
�
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TSYS Announces Fourth Quarter 2014 Earnings
Page 12 of 16
�
Supplemental Information:
�
| � | �� | Total Accounts on File | � | |||||||||
| (in millions) | �� | December 2014 |
� | �� | December 2013 |
� | �� | % Change |
� | |||
| Consumer Credit |
�� | � | 270.0 | �� | �� | � | 228.9 | �� | �� | � | 18.0 | �� |
| Retail |
�� | � | 28.4 | �� | �� | � | 27.8 | �� | �� | � | 2.2 | �� |
| �� | � |
� |
� | �� | � |
� |
� | �� | ||||
| Total Consumer |
�� | � | 298.4 | �� | �� | � | 256.7 | �� | �� | � | 16.3 | �� |
| Commercial |
�� | � | 41.6 | �� | �� | � | 39.9 | �� | �� | � | 4.2 | �� |
| Other |
�� | � | 22.4 | �� | �� | � | 18.9 | �� | �� | � | 18.7 | �� |
| �� | � |
� |
� | �� | � |
� |
� | �� | ||||
| Subtotal |
�� | � | 362.4 | �� | �� | � | 315.5 | �� | �� | � | 14.9 | �� |
| Prepaid/Stored Value |
�� | � | 127.3 | �� | �� | � | 118.0 | �� | �� | � | 7.9 | �� |
| Government Services |
�� | � | 67.4 | �� | �� | � | 62.2 | �� | �� | � | 8.2 | �� |
| Commercial Card Single Use |
�� | � | 59.6 | �� | �� | � | 45.3 | �� | �� | � | 31.5 | �� |
| �� | � |
� |
� | �� | � |
� |
� | �� | ||||
| Total AOF |
�� | � | 616.7 | �� | �� | � | 541.0 | �� | �� | � | 14.0 | �� |
| �� | � |
� |
� | �� | � |
� |
� | �� | ||||
�
| Growth in Accounts on File (in millions): |
� | |||||
| � | �� | December�2013�to December 2014 |
� | December�2012�to December 2013 |
� | |
| Beginning balance |
�� | 541.0 | � | � | 479.3 | �� |
| Change in accounts on file due to: |
�� | � | ||||
| Internal growth of existing clients |
�� | 40.0 | � | � | 37.6 | �� |
| New clients |
�� | 75.3 | � | � | 61.2 | �� |
| Purges/Sales |
�� | (39.0) | � | � | (36.4 | )� |
| Deconversions |
�� | (0.6) | � | � | (0.7 | )� |
| �� | � |
� | � |
� |
� | |
| Ending balance |
�� | 616.7 | � | � | 541.0 | �� |
| �� | � |
� | � |
� |
� | |
�
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TSYS Announces Fourth Quarter 2014 Earnings
Page 13 of 16
�
Reconciliation of GAAP to Non-GAAP Financial Measures
Non-GAAP Measures
The schedule below provides a reconciliation of revenues and operating results on a constant currency basis to reported revenues and operating income. This non-GAAP measure presents fourth quarter 2014 financial results using the previous year�s foreign currency exchange rates. On a full year constant currency basis, TSYS� total revenues grew 17.8% as compared to a reported GAAP increase of 18.5%.
The schedule below also provides a reconciliation of basic EPS, adjusted for the after-tax impact of acquisition intangible amortization, share-based compensation and merger and acquisition costs, to adjusted EPS.
The tax rate used in the calculation of adjusted EPS for the quarter and year is equal to an estimate of our annual effective tax rate on GAAP income. This effective rate is estimated annually and may be adjusted during the year to take into account events or trends that materially impact the effective tax rate including, but not limited to, significant changes resulting from tax legislation, material changes in the mix of revenues and expenses by entity and other significant events.
The schedule also provides a reconciliation of net income, adjusted for income from discontinued operations, equity in income of equity investments, income taxes, nonoperating expense, depreciation and amortization, share-based compensation, and merger and acquisition expenses, to adjusted EBITDA.
TSYS believes that non-GAAP financial measures are important to enable investors to understand and evaluate its ongoing operating results. Accordingly, TSYS includes non-GAAP financial measures when reporting its financial results to shareholders and potential investors in order to provide them with an additional tool to evaluate TSYS� ongoing business operations. TSYS believes that the non-GAAP financial measures are representative of comparative financial performance that reflects the economic substance of TSYS� current and ongoing business operations.
Although non-GAAP financial measures are often used to measure TSYS� operating results and assess its financial performance, they are not necessarily comparable to similarly titled captions of other companies due to potential inconsistencies in the method of calculation.
TSYS believes that its use of non-GAAP financial measures provides investors with the same key financial performance indicators that are utilized by management to assess TSYS� operating results, evaluate the business and make operational decisions on a prospective, going-forward basis. Hence, management provides disclosure of non-GAAP financial measures to give shareholders and potential investors an opportunity to see TSYS as viewed by management, to assess TSYS with some of the same tools that management utilizes internally and to be able to compare such information with prior periods. TSYS believes that the presentation of GAAP financial measures alone would not provide its shareholders and potential investors with the ability to appropriately analyze its ongoing operational results, and therefore expected future results. TSYS therefore believes that inclusion of non-GAAP financial measures provides investors with additional information to help them better understand its financial statements just as management utilizes these non-GAAP financial measures to better understand the business, manage budgets and allocate resources.
�
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TSYS Announces Fourth Quarter 2014 Earnings
Page 14 of 16
�
Reconciliation of GAAP to Non-GAAP
Constant Currency Comparison
(unaudited)
(in thousands)
�
| � | �� | Three�Months�Ended�December�31, | � | � | Twelve Months Ended December�31, | � | ||||||||||||||||||
| � | �� | 2014 | � | � | 2013 | � | �� | Percent Change |
� | � | 2014 | � | �� | 2013 | � | �� | Percent Change |
� | ||||||
| Consolidated |
�� | � | �� | � | �� | �� | ||||||||||||||||||
| Constant currency (1) |
�� | $ | 638,111 | �� | � | � | 583,103 | �� | �� | � | 9.4 | %� | � | $ | 2,431,947 | �� | �� | � | 2,064,305 | �� | �� | � | 17.8 | %� |
| Foreign currency (2) |
�� | � | (3,007 | )� | � | � | ��� | �� | �� | � | � | 14,930 | �� | �� | � | ��� | �� | �� | ||||||
| �� | � |
� |
� | � | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
| Total revenues |
�� | $ | 635,104 | �� | � | � | 583,103 | �� | �� | � | 8.9 | %� | � | $ | 2,446,877 | �� | �� | � | 2,064,305 | �� | �� | � | 18.5 | %� |
| �� | � |
� |
� | � | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
| Constant currency (1) |
�� | $ | 572,166 | �� | � | � | 525,259 | �� | �� | � | 8.9 | %� | � | $ | 2,178,951 | �� | �� | � | 1,823,708 | �� | �� | � | 19.5 | %� |
| Foreign currency (2) |
�� | � | (2,865 | )� | � | � | ��� | �� | �� | � | � | 14,027 | �� | �� | � | ��� | �� | �� | ||||||
| �� | � |
� |
� | � | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
| Total revenues before reimbursable items |
�� | $ | 569,301 | �� | � | � | 525,259 | �� | �� | � | 8.4 | %� | � | $ | 2,192,978 | �� | �� | � | 1,823,708 | �� | �� | � | 20.2 | %� |
| �� | � |
� |
� | � | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
| Constant currency (1) |
�� | $ | 122,786 | �� | � | � | 108,858 | �� | �� | � | 12.8 | %� | � | $ | 422,646 | �� | �� | � | 382,500 | �� | �� | � | 10.5 | %� |
| Foreign currency (2) |
�� | � | (13 | )� | � | � | ��� | �� | �� | � | � | 8,994 | �� | �� | � | ��� | �� | �� | ||||||
| �� | � |
� |
� | � | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
| Operating income |
�� | $ | 122,773 | �� | � | � | 108,858 | �� | �� | � | 12.8 | %� | � | $ | 431,640 | �� | �� | � | 382,500 | �� | �� | � | 12.8 | %� |
| �� | � |
� |
� | � | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
| International Services |
�� | � | �� | � | �� | �� | ||||||||||||||||||
| Constant currency (1) |
�� | $ | 101,655 | �� | � | � | 96,129 | �� | �� | � | 5.7 | %� | � | $ | 348,595 | �� | �� | � | 341,549 | �� | �� | � | 2.1 | %� |
| Foreign currency (2) |
�� | � | (3,005 | )� | � | � | ��� | �� | �� | � | � | 14,764 | �� | �� | � | ��� | �� | �� | ||||||
| �� | � |
� |
� | � | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
| Total revenues |
�� | $ | 98,650 | �� | � | � | 96,129 | �� | �� | � | 2.6 | %� | � | $ | 363,359 | �� | �� | � | 341,549 | �� | �� | � | 6.4 | %� |
| �� | � |
� |
� | � | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
�
| (1) | Reflects current period results on a non-GAAP basis as if foreign currency rates did not change from the comparable prior year period. |
| (2) | Reflects the impact of calculated changes in foreign currency rates from the comparable period. |
Revenues Before Reimbursable Items
(unaudited)
(in thousands)
�
| � | �� | Three�Months�Ended�December�31, | � | � | Twelve Months Ended December�31, | � | ||||||||||||||||||
| � | �� | 2014 | � | �� | 2013 | � | �� | Percent Change |
� | � | 2014 | � | �� | 2013 | � | �� | Percent Change |
� | ||||||
| Total revenues |
�� | $ | 635,104 | �� | �� | � | 583,103 | �� | �� | � | 8.9 | %� | � | $ | 2,446,877 | �� | �� | � | 2,064,305 | �� | �� | � | 18.5 | %� |
| Reimbursable items |
�� | � | 65,803 | �� | �� | � | 57,844 | �� | �� | � | 13.8 | �� | � | � | 253,899 | �� | �� | � | 240,597 | �� | �� | � | 5.5 | �� |
| �� | � |
� |
� | �� | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
| Revenues before reimbursable items |
�� | $ | 569,301 | �� | �� | � | 525,259 | �� | �� | � | 8.4 | %� | � | $ | 2,192,978 | �� | �� | � | 1,823,708 | �� | �� | � | 20.2 | %� |
| �� | � |
� |
� | �� | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
�
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TSYS Announces Fourth Quarter 2014 Earnings
Page 15 of 16
�
Reconciliation of GAAP to Non-GAAP
Adjusted Earnings per Share
(unaudited)
(in thousands, except per share data)
�
| � | �� | Three�Months�Ended�December�31, | � | � | Twelve�Months�Ended�December�31, | � | ||||||||||||||||||
| � | �� | 2014 | � | �� | 2013 | � | �� | Percent Change |
� | � | 2014 | � | �� | 2013 | � | �� | Percent Change |
� | ||||||
| Income from continuing operations attributable to TSYS common shareholders |
�� | $ | 83,198 | �� | �� | � | 66,058 | �� | �� | � | 25.9 | %� | � | $ | 275,216 | �� | �� | � | 246,893 | �� | �� | � | 11.5 | %� |
| Adjust for amounts attributable to TSYS common shareholders: |
�� | �� | �� | � | �� | �� | ||||||||||||||||||
| Add: Acquisition intangible amortization, net of taxes |
�� | $ | 17,747 | �� | �� | � | 16,609 | �� | �� | � | 6.9 | %� | � | � | 65,127 | �� | �� | � | 43,743 | �� | �� | � | 48.9 | %� |
| Add: Share-based compensation, net of taxes |
�� | � | 5,777 | �� | �� | � | 6,405 | �� | �� | � | (9.8 | )� | � | � | 20,944 | �� | �� | � | 19,830 | �� | �� | � | 5.6 | �� |
| Add: NetSpend M&A expenses, net of taxes* |
�� | � | 3 | �� | �� | � | 1,318 | �� | �� | � | (99.8 | )� | � | � | 3,115 | �� | �� | � | 15,251 | �� | �� | � | (79.6 | )� |
| �� | � |
� |
� | �� | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
| Adjusted earnings |
�� | $ | 106,725 | �� | �� | � | 90,390 | �� | �� | � | 18.1 | %� | � | $ | 364,402 | �� | �� | � | 325,717 | �� | �� | � | 11.9 | %� |
| �� | � |
� |
� | �� | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
| Basic EPS�Income from continuing operations attributable to TSYS common shareholders |
�� | �� | �� | � | �� | �� | ||||||||||||||||||
| As reported (GAAP) |
�� | $ | 0.45 | �� | �� | � | 0.35 | �� | �� | � | 28.8 | %� | � | $ | 1.48 | �� | �� | � | 1.31 | �� | �� | � | 12.8 | %� |
| �� | � |
� |
� | �� | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
| Adjust for amounts attributable to TSYS common shareholders: |
�� | �� | �� | � | �� | �� | ||||||||||||||||||
| Add: Acquisition intangible amortization, net of taxes |
�� | � | 0.10 | �� | �� | � | 0.09 | �� | �� | � | 9.2 | �� | � | � | 0.35 | �� | �� | � | 0.23 | �� | �� | � | 50.6 | �� |
| Add: Share-based compensation, net of taxes |
�� | � | 0.03 | �� | �� | � | 0.03 | �� | �� | � | (7.7 | )� | � | � | 0.11 | �� | �� | � | 0.11 | �� | �� | � | 6.8 | �� |
| Add: NetSpend M&A expenses, net of taxes* |
�� | � | ��� | �� | �� | � | 0.01 | �� | �� | � | (100.0 | )� | � | � | 0.02 | �� | �� | � | 0.08 | �� | �� | � | (79.4 | )� |
| �� | � |
� |
� | �� | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
| Adjusted EPS ** |
�� | $ | 0.58 | �� | �� | � | 0.48 | �� | �� | � | 20.8 | %� | � | $ | 1.96 | �� | �� | � | 1.73 | �� | �� | � | 13.2 | %� |
| �� | � |
� |
� | �� | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
| Average common shares and participating securities |
�� | � | 185,221 | �� | �� | � | 189,447 | �� | �� | � | � | 186,222 | �� | �� | � | 188,389 | �� | �� | ||||||
| �� | � |
� |
� | �� | � |
� |
� | �� | � | � |
� |
� | �� | � |
� |
� | �� | |||||||
�
| * | Certain merger and acquisition costs are nondeductible for income tax purposes |
| ** | Adjusted EPS amounts may not total due to rounding. |
Adjusted EBITDA
(unaudited)
(in thousands)
�
| � | �� | Three Months Ended December�31, | � | � | Twelve Months Ended December�31, |
� | ||||||||||||||||||
| � | �� | 2014 | � | � | 2013 | � | � | Percent Change |
� | � | 2014 | � | � | 2013 | � | � | Percent Change |
� | ||||||
| Net income |
�� | $ | 81,242 | �� | � | � | 69,393 | �� | � | � | 17.1 | %� | � | $ | 329,406 | �� | � | � | 256,597 | �� | � | � | 28.4 | %� |
| Adjust for: |
�� | � | � | � | � | � | ||||||||||||||||||
| Deduct: Loss (Income) from discontinued operations |
�� | � | 3,338 | �� | � | � | (751 | )� | � | � | nm | �� | � | � | (48,655 | )� | � | � | (2,055 | )� | � | � | nm | �� |
| Deduct: Equity in income of equity investments |
�� | � | (5,751 | )� | � | � | (3,691 | )� | � | � | (55.8 | )� | � | � | (17,583 | )� | � | � | (13,047 | )� | � | � | (34.8 | )� |
| Add: Income taxes |
�� | � | 35,428 | �� | � | � | 33,435 | �� | � | � | 6.0 | �� | � | � | 129,761 | �� | � | � | 110,981 | �� | � | � | 16.9 | �� |
| Add: Nonoperating expense |
�� | � | 8,516 | �� | � | � | 10,472 | �� | � | � | (18.7 | )� | � | � | 38,711 | �� | � | � | 30,024 | �� | � | � | 28.9 | �� |
| Add: Depreciation and amortization |
�� | � | 63,191 | �� | � | � | 61,268 | �� | � | � | 3.1 | �� | � | � | 246,620 | �� | � | � | 199,026 | �� | � | � | 23.9 | �� |
| �� | � |
� |
� | � | � |
� |
� | � | � | � |
� |
� | � | � |
� |
� | � | |||||||
| EBITDA |
�� | $ | 185,964 | �� | � | � | 170,126 | �� | � | � | 9.3 | %� | � | $ | 678,260 | �� | � | � | 581,526 | �� | � | � | 16.6 | %� |
| Adjust for: |
�� | � | � | � | � | � | ||||||||||||||||||
| Add: Share-based compensation |
�� | � | 7,771 | �� | � | � | 9,345 | �� | � | � | (16.8 | )� | � | � | 30,790 | �� | � | � | 28,933 | �� | � | � | 6.4 | �� |
| Add: NetSpend M&A operating expenses* |
�� | � | 3 | �� | � | � | 1,626 | �� | � | � | (99.8 | )� | � | � | 3,217 | �� | � | � | 13,634 | �� | � | � | (76.4 | )� |
| �� | � |
� |
� | � | � |
� |
� | � | � | � |
� |
� | � | � |
� |
� | � | |||||||
| Adjusted EBITDA |
�� | $ | 193,738 | �� | � | � | 181,097 | �� | � | � | 7.0 | %� | � | $ | 712,267 | �� | � | � | 624,093 | �� | � | � | 14.1 | %� |
| �� | � |
� |
� | � | � |
� |
� | � | � | � |
� |
� | � | � |
� |
� | � | |||||||
�
| nm | = not meaningful |
| * | Excludes share-based compensation |
�
- more -
TSYS Announces Fourth Quarter 2014 Earnings
Page 16 of 16
�
Reconciliation of GAAP to Non-GAAP
Segment Operating Margin and Consolidated Adjusted Operating Margin
(unaudited)
(in thousands)
�
| � | � | Three Months Ended December�31, 2014 | � | � | Three Months Ended December�31, 2013 | � | ||||||||||||||||||
| � | � | Adjusted�Segment Operating Income |
� | � | Revenues�before Reimbursable�Items |
� | � | Adjusted Operating�Margin |
� | � | Adjusted�Segment Operating Income |
� | � | Revenues�before Reimbursable�Items |
� | � | Adjusted Operating�Margin |
� | ||||||
| North America Services |
� | $ | 99,620 | �� | � | � | 255,539 | �� | � | � | 38.98� | %� | � | $ | 87,110 | �� | � | � | 223,266 | �� | � | � | 39.02� | %� |
| International Services |
� | � | 22,849 | �� | � | � | 92,895 | �� | � | � | 24.60 | �� | � | � | 17,986 | �� | � | � | 90,595 | �� | � | � | 19.85 | �� |
| Merchant Services |
� | � | 31,399 | �� | � | � | 107,677 | �� | � | � | 29.16 | �� | � | � | 35,952 | �� | � | � | 110,375 | �� | � | � | 32.57 | �� |
| NetSpend |
� | � | 32,742 | �� | � | � | 119,165 | �� | � | � | 27.48 | �� | � | � | 31,737 | �� | � | � | 104,144 | �� | � | � | 30.47 | �� |
| Intersegment |
� | � | ��� | �� | � | � | (5,975 | )� | � | � | � | ��� | �� | � | � | (3,121 | )� | � | ||||||
| Corporate admin and other |
� | � | (31,897 | )� | � | � | ��� | �� | � | � | � | (27,620 | )� | � | � | ��� | �� | � | ||||||
| � | � |
� |
� | � | � |
� |
� | � | � | � |
� |
� | � | � |
� |
� | � | |||||||
| Adjusted�operating margin |
� | $ | 154,713 | �� | � | � | 569,301 | �� | � | � | 27.18� | %� | � | $ | 145,165 | �� | � | � | 525,259 | �� | � | � | 27.64� | %� |
| Acquisition intangible amortization |
� | � | (24,166 | )� | � | � | � | � | (24,751 | )� | � | � | ||||||||||||
| NetSpend M&A operating expenses |
� | � | (3 | )� | � | � | � | � | (2,211 | )� | � | � | ||||||||||||
| Share-based compensation |
� | � | (7,771 | )� | � | � | � | � | (9,345 | )� | � | � | ||||||||||||
| � | � |
� |
� | � | � | � | � |
� |
� | � | � | |||||||||||||
| Operating�income�and margin* |
� | $ | 122,773 | �� | � | � | 569,301 | �� | � | � | 21.57� | %� | � | $ | 108,858 | �� | � | � | 525,259 | �� | � | � | 20.72� | %� |
| Reimbursable�items |
� | � | � | 65,803 | �� | � | � | � | � | 57,844 | �� | � | ||||||||||||
| � | � | � |
� |
� | � | � | � | � |
� |
� | � | |||||||||||||
| Operating�margin�(US GAAP) |
� | $ | 122,773 | �� | � | � | 635,104 | �� | � | � | 19.33� | %� | � | $ | 108,858 | �� | � | � | 583,103 | �� | � | � | 18.67� | %� |
| � | � |
� |
� | � | � |
� |
� | � | � | � |
� |
� | � | � |
� |
� | � | |||||||
| � | � | � Twelve Months Ended December�31, 2014 |
� | � | Twelve�Months�Ended�December�31,�2013 | � | ||||||||||||||||||
| � | � | Adjusted�Segment Operating Income |
� | � | Revenues�before Reimbursable�Items |
� | � | Adjusted Operating�Margin |
� | � | Adjusted�Segment Operating Income |
� | � | Revenues�before Reimbursable�Items |
� | � | Adjusted Operating�Margin |
� | ||||||
| North America Services |
� | $ | 351,512 | �� | � | � | 954,082 | �� | � | � | 36.84� | %� | � | $ | 321,619 | �� | � | � | 860,645 | �� | � | � | 37.37� | %� |
| International Services |
� | � | 55,123 | �� | � | � | 341,785 | �� | � | � | 16.13 | �� | � | � | 42,068 | �� | � | � | 321,484 | �� | � | � | 13.09 | �� |
| Merchant Services |
� | � | 134,872 | �� | � | � | 435,649 | �� | � | � | 30.96 | �� | � | � | 155,643 | �� | � | � | 446,277 | �� | � | � | 34.88 | �� |
| NetSpend |
� | � | 128,285 | �� | � | � | 482,686 | �� | � | � | 26.58 | �� | � | � | 66,353 | �� | � | � | 207,851 | �� | � | � | 31.92 | �� |
| Intersegment |
� | � | ��� | �� | � | � | (21,224 | )� | � | � | � | ��� | �� | � | � | (12,549 | )� | � | ||||||
| Corporate admin and other |
� | � | (107,175 | )� | � | � | ��� | �� | � | � | � | (94,137 | )� | � | � | ��� | �� | � | ||||||
| � | � |
� |
� | � | � |
� |
� | � | � | � |
� |
� | � | � |
� |
� | � | |||||||
| Adjusted�operating margin |
� | $ | 562,617 | �� | � | � | 2,192,978 | �� | � | � | 25.66� | %� | � | $ | 491,546 | �� | � | � | 1,823,708 | �� | � | � | 26.95� | %� |
| Acquisition intangible amortization |
� | � | (96,971 | )� | � | � | � | � | (65,893 | )� | � | � | ||||||||||||
| NetSpend M&A operating expenses |
� | � | (3,217 | )� | � | � | � | � | (14,220 | )� | � | � | ||||||||||||
| Share-based compensation |
� | � | (30,790 | )� | � | � | � | � | (28,933 | )� | � | � | ||||||||||||
| � | � |
� |
� | � | � | � | � |
� |
� | � | � | |||||||||||||
| Operating�income�and margin* |
� | $ | 431,639 | �� | � | � | 2,192,978 | �� | � | � | 19.68� | %� | � | $ | 382,500 | �� | � | � | 1,823,708 | �� | � | � | 20.97� | %� |
| Reimbursable�items |
� | � | � | 253,899 | �� | � | � | � | � | 240,597 | �� | � | ||||||||||||
| � | � | � |
� |
� | � | � | � | � |
� |
� | � | |||||||||||||
| Operating�margin�(US GAAP) |
� | $ | 431,639 | �� | � | � | 2,446,877 | �� | � | � | 17.64� | %� | � | $ | 382,500 | �� | � | � | 2,064,305 | �� | � | � | 18.53� | %� |
| � | � |
� |
� | � | � |
� |
� | � | � | � |
� |
� | � | � |
� |
� | � | |||||||
�
| * | Operating margin on revenue before reimbursable items |
�
�
- ### -
![]() 2014
Fourth Quarter and YTD Results January 27, 2015
Exhibit 99.2
�2015 Total System Services, Inc.� Proprietary. All rights reserved worldwide. |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Forward-Looking Statements
2
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 to
risks, uncertainties and changes in circumstances.� Forward-looking
statements include all statements that are not historical facts and can be
identified by the use of forward-looking terminology such as the words
�believe,�
�expect,�
�anticipate,�
�intend,�
�plan,�
�potential�, �estimate�
or
similar expressions.� Actual results may differ materially from those set
forth in the forward-looking statements due to a variety of
factors.� More information about these risks, uncertainties and factors
may be found in TSYS�
filings with the Securities and Exchange Commission, including its
2013 Annual Report on Form 10-K.� TSYS does not assume any obligation
to update any forward-looking statements as a result of new information,
future developments or otherwise. |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Use of Non-GAAP Financial Measures
3
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 margin excluding
reimbursable items; revenues measured on a constant currency basis; free
cash flow; EBITDA, adjusted EBITDA, adjusted earnings per share,
adjusted
segment operating income and adjusted segment operating margin. The most
comparable GAAP measures to these measures are revenues; operating
margin; revenues; cash flows from operating activities; net income; net income;
earnings per share, operating income and operating margin, respectively.
Management uses these non-GAAP financial measures to assess the
performance of TSYS�
core business. TSYS believes that these non-GAAP
financial measures provide meaningful additional information about TSYS to
assist investors in evaluating TSYS�
operating results. These non-GAAP
financial measures should not be considered as a substitute for operating
results determined in accordance with GAAP and may not be comparable to
other similarly titled measures of other companies. The computations of the
non-GAAP financial measures used in this slide presentation are set forth in
the Appendix to this slide presentation. |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Troy Woods
President & Chief Executive Officer |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Paul Todd
Chief Financial Officer |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
4Q 2014 North America Segment Highlights
6
($ in millions)
(*) Revenues Before Reimbursable Items
($ in millions)
0.8%
4.4%
4.5%
6.8%
Adjusted Segment Operating Income
Operating Margin
(1)
Includes Credit, Debit,
Retail, Prepaid & Loyalty
(2)
Includes Healthcare
9.1%
Historical High Revenue
Second Straight Quarter of Double Digit
Growth
Largest Quarter and Year of Operating Income
8.7%
10.9%
14.5%
Segment Revenue by Line of Business*
Consumer (1)
Commercial (2)
Other
$68.7
$81.3
$84.4
$87.1
$74.6
$84.6
$92.7
$99.6
33.4%
37.9%
38.9%
39.0%
33.2%
36.3%
38.5%
39.0%
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
$205.6
$214.5
$217.3
$223.3
$224.4
$233.2
$241.0
$255.5
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
Segment
Revenue*
YOY Growth %
3%
75%
22%
* |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
4Q 2014 North America Segment Highlights
7
(*) Growth
Excluding
Prepaid,
Government
Services
and
Single
Use
Accounts
(in millions)
(in millions)
5.2%
6.3%
16.2%
16.5%
16.9%
11.2%
11.6%
13.4%
7.8%
11.5%
17.6%
13.4%
15.6%
17.2%
17.1%
Six Straight Quarters of Double Digit Growth in Traditional Accounts on File*
Largest Quarter and Year of Transaction Volume
Same Client Transactions up 13.0%
18.5%
19.1%
20.7%
17.4%
18.1%
18.3%
14.1%
16.6%
19.8%
2,013.4
2,235.0
2,395.8
2,488.6
2,327.6
2,696.7
2,833.6
2,980.0
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
Transaction Volume
YOY Growth %
422.8
430.7
461.4
481.9
495.5
510.3
541.4
550.0
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
Accounts on File
YOY Growth % |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Adjusted Segment Operating Income
5%
11%
4Q 2014 International Segment Highlights
8
($ in millions)
(*) Revenues Before Reimbursable Items
($ in millions)
(2.6%)
(4.0%)
0.7%
(0.9%)
3.1%
9.0%
8.6%
84%
0.5%
(4.6%)
Revenue $92.9M* �
Up 2.5%
Up 5.7% on Constant Currency
($2.9M) of Currency Impact
Processing Revenue Up in All Geographies
Margin Expansion Continues
Extended Relationship with Carrefour
(1.0%)
10.6%
1.8%
12.2%
4.4%
2.5%
5.7%
Reported
Constant
Currency
Segment Revenue by Region
QTD
Europe
MEA
Rest Of World
$76.4
$76.6
$77.9
$90.6
$76.8
$84.7
$87.4
$92.9
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
Segment
Revenue*
YOY Growth %
$6.9
$7.7
$9.5
$18.0
$4.6
$11.7
$16.0
$22.8
9.0%
10.0%
12.2%
19.9%
5.9%
13.9%
18.3%
24.6%
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
Operating
Margin
* |
![]() 4Q
2014 International Segment Highlights 9
(in millions)
(in millions)
3.7%
9.9%
12.1%
8.5%
14.2%
23.3%
26.7%
17.3%
8.9%
19.3%
Same Client Transactions Grew 11.8%
7.5%
13.4%
8.1%
9.3%
12.7%
11.3%
�2015 Total System Services, Inc.� Proprietary. All rights reserved worldwide. 434.0
492.4
525.5
555.6
517.9
558.1
574.3
618.1
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
Transaction Volume
YOY Growth%
55.7
58.0
59.2
59.1
60.7
62.3
64.1
66.6
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
Accounts on File
YOY Growth% |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Revenues Decreased 2.4%*
-
Direct Up 2.6% with Continued Focus on Growth
Initiatives
-
Indirect Down (9.1)% But Exceeded Expectations
Industry Veteran Hired to Lead TSYS Merchant
Solutions
4Q 2014 Merchant Segment Highlights
10
(*) Revenues Before Reimbursable Items
($ in millions)
11.1%
15.6%
5.4%
4.3%
Adjusted Segment Operating Income
($ in millions)
41%
59%
(4.3%)
(4.1%)
1.2%
(2.4%)
Segment Revenue by Mix*
QTD
Direct
Indirect
$109.3
$113.0
$113.6
$110.4
$104.6
$108.3
$115.0
$107.7
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
Segment
Revenue*
YOY Growth %
$37.6
$41.3
$40.8
$36.0
$30.2
$32.9
$40.4
$31.4
34.4%
36.6%
35.9%
32.6%
28.8%
30.4%
35.1%
29.2%
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
Operating Margin* |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
11
4Q 2014 Merchant Segment Highlights
(*) Excludes Managed Accounts
Segment Revenue by LOB
YOY Growth %
($ in billions)
35.3%
40.6%
22.0%
11.1%
(12%)
45%
55%
26%
22%
(11%)
(12%)
(12%)
($ in millions)
4%
(14%)
9.3%
POS Transactions Increased 4.4%, Excluding Deconverted Accounts
SBS Sales Volume Up 10.6%
Continued Investment in Product and Service Offerings
8.2%
1%
(10%)
4%
(2%)
10.0%
10.6%
(9%)
3%
$52
$51
$51
$48
$45
$46
$50
$44
$57
$62
$63
$62
$59
$62
$65
$64
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
Indirect
Direct
$4.8
$5.3
$5.3
$5.2
$5.3
$5.8
$5.9
$5.7
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
SBS
Sales Volume
*
YOY Growth % |
![]() Adjusted Segment Operating Income*
Operating Margin
Segment Revenue
YOY Growth %
4Q 2014 NetSpend Segment Highlights
12
($ in millions)
Revenue $119.2M �
Up 14.4%
Added 5k Distributing Locations and
Employers
Bringing the Total to Over 85k
Launched WalMart in Retail Channel
($ in millions)
(*NOTE: Periods prior to the acquisition by TSYS have been restated )
$28.0
$29.3
$34.6
$31.7
$28.7
$30.7
$36.1
$32.7
23.9%
27.9%
33.4%
30.5%
21.7%
26.3%
31.7%
27.5%
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
$117.3
$104.9
$103.7
$104.1
$132.6
$116.8
$114.0
$119.2
28.3%
22.9%
22.2%
16.1%
13.1%
11.4%
10.0%
14.4%
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
Segment Revenue by Channel
QTD
Partner
Retail
Direct
Paycard
10%
42%
34%
14%
�2015 Total System Services, Inc.� Proprietary. All rights reserved worldwide. * |
![]() 4Q
2014 NetSpend Segment Highlights 13
Gross Dollar Volume
YOY Growth %
Direct Deposit Active Cards
YOY Growth %
Direct Deposit Active Cards up 21.9%
Gross Dollar Volume (GDV) up 18.2%
Full Year 2014 Exceeded $20 Billion
(in thousands)
($ in millions)
66.7%
42.3%
23.8%
22.1%
42.8%
30.1%
22.4%
21.2%
17.6%
20.6%
21.9%
21.5%
22.1%
17.2%
16.6%
18.2%
$5,378.7
$3,947.9
$3,780.9
$3,967.6
$6,567.2
$4,628.0
$4,409.3
$4,691.5
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1,707.9
1,361.4
1,261.1
1,321.1
2,070.3
1,600.7
1,520.7
1,610.2
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
�2015 Total System Services, Inc.� Proprietary. All rights reserved worldwide. |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Consolidated Selected Financial Highlights
14
$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
193,738
181,097
7.0
Adjusted EBITDA*
712,267
624,093
14.1
$0.58
$0.48
20.8
Adjusted EPS* from Continuing
Operations
$1.96
$1.73
13.2
(in
thousands,
except
per
share
data)
4
Qtr
2014
4
Qtr
2013
Percent
Change
YTD
2014
YTD
2013
Percent
Change
(*) Adjusted EBITDA and Adjusted EPS definitions are contained in Appendix
th
th |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Revenues before
Reimbursable
Items
Adjusted
Operating Margin
Adjusted
Segment
Operating Income
North America
$99,620
$255,539
38.98%
International
22,849
92,895
24.60%
Merchant
31,399
107,677
29.16%
NetSpend
32,742
119,165
27.48%
Eliminations
--
(5,975)
Corporate administration excluding stock comp
(31,897)
--
Adjusted operating margin
$154,713
$569,301
27.18%
Amortization of acquisition intangibles
(24,166)
NetSpend M&A expenses
(3)
Stock-based compensation
(7,771)
Operating income (US GAAP)
$122,773
Segment Operating Margin and Consolidated
Adjusted Operating Margin
(in thousands)
15
Three Months Ended December 31, 2014 |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Revenues before
Reimbursable
Items
Adjusted
Operating Margin
Adjusted
Segment
Operating Income
North America
$351,512
$954,082
36.84%
International
55,123
341,785
16.13%
Merchant
134,872
435,649
30.96%
NetSpend
128,285
482,686
26.58%
Eliminations
--
(21,224)
Corporate administration excluding stock comp
(107,175)
--
Adjusted operating margin
$562,617
$2,192,978
25.66%
Amortization of acquisition intangibles
(96,971)
NetSpend M&A expenses
(3,217)
Stock-based compensation
(30,790)
Operating income (US GAAP)
$431,639
Segment Operating Margin and Consolidated
Adjusted Operating Margin
(in thousands)
16
Twelve Months Ended December 31, 2014 |
![]() Rollforward of Quarterly Cash Balance
$200
$500
$100
$0
$300
Operating
Activities
$171
Cap Ex
($68)
Debt Pmts
($21)
Dividends
($19)
Ending
Balance
$289
(in millions)
9/30/2014
12/31/2014
17
$400
Share
Repurchase
($50)
Beginning
Balance
$266
Other
($10)
�2015 Total System Services, Inc.� Proprietary. All rights reserved worldwide. |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Cash Flow Strength:
2014 Consolidated Financial Highlights
18
(in millions)
$712
$561
$325
$329
$289
$0
$75
$150
$225
$300
$375
$450
$525
$600
$675
$750
Adjusted EBITDA
Cash flow from operations
Free cash flow
Net income
Ending cash |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
2015 Guidance*
Range
Range
Percent Change
Total Revenues
$2,620
to
$2,660
to
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 Basic Weighted Shares
186
(in millions, except per share data)
19
(*) See Appendix for guidance assumptions
7%
9% |
![]() Q&A
�2015 Total System Services, Inc.� Proprietary. All rights reserved worldwide. |
![]() Appendix
�2015 Total System Services, Inc.� Proprietary. All rights reserved worldwide. |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
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 EPS is adjusted earnings divided by weighted average shares outstanding
used for basic EPS calculations. Adjusted earnings is net income excluding
the after-tax impact of stock-based compensation expenses, amortization of acquisition intangibles, and NetSpend
merger & acquisition expenses.
�
Adjusted segment operating income is operating income at the segment level adjusted
for amortization of acquisition intangibles. �
Adjusted segment operating margin is adjusted segment operating income divided by
segment revenues before reimbursable items. �
The Company believes that these non-GAAP financial measures it presents are
useful to investors in evaluating the Company�s operating performance
for the following reasons: �
adjusted
EBITDA
and
adjusted
EPS
are
widely
used
by
investors
to
measure
a
company�s
operating
performance
without
regard
to
items,
such
as interest expense, income tax expense, depreciation and amortization, merger and
acquisition expenses and employee stock-based compensation
expense
that
can
vary
substantially
from
company
to
company
depending
upon
their
respective
financing
structures
and
accounting policies, the book values of their assets, their capital structures and
the methods by which their assets were acquired; and �
securities analysts use adjusted EBITDA and adjusted EPS as supplemental measures
to evaluate the overall operating performance of companies.
�
By comparing the Company�s adjusted EBITDA and adjusted EPS in different
historical periods, investors can evaluate the Company�s operating
results without the additional variations caused by employee stock-based compensation expense, which may not be comparable
from
period
to
period
due
to
changes
in
the
fair
market
value
of
the
Company�s
common
stock
(which
is
influenced
by
external
factors
like
the volatility of public markets and the financial performance of the
Company�s peers) and is not a key measure of the Company�s
operations.
�
The Company�s management uses the non-GAAP financial measures:
�
as measures of operating performance, because they exclude the impact of items not
directly resulting from the Company�s core operations; �
for planning purposes, including the preparation of the Company�s annual
operating budget; �
to allocate resources to enhance the financial performance of the Company�s
business; �
to evaluate the effectiveness of the Company�s business strategies; and
�
in communications with the Company�s board of directors concerning the
Company�s financial performance. 22 |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
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
18.7
22.4
21.2
5.7
Subtotal
362.4
315.5
14.9
362.4
355.0
2.1
Prepaid*/
Stored Value
127.3
118.0
7.9
127.3
125.1
1.8
Government
Services
67.4
62.2
8.2
67.4
66.7
1.0
Commercial Card
Single Use
59.6
45.3
31.5
59.6
58.7
1.5
Total AOF
616.7
541.0
14.0
616.7
605.5
1.8
Appendix: Accounts on File Portfolio Summary
(in millions)
Dec
2014
Dec
2013
%
Change
Dec
2014
Sep
2014
%
Change
23
(* -
Prepaid does not include NetSpend accounts) |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Appendix: Non-GAAP Reconciliation �
Revenues Before Reimbursable Items
Three Months
Ended�������������������� Twelve Months Ended
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
$569,301
$525,259
$2,192,978
$1,823,708
(in thousands)
24
12/31/14
12/31/13
12/31/14
12/31/13 |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Appendix: Non-GAAP Reconciliation �
Adjusted
Segment Operating Income and Operating Margin
Three Months
Ended���������������������������������� Twelve Months Ended
(in thousands)
25
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: Corporate admin and other
39,671
39,176
141,182
137,290
Total segment adjusted operating income
$186,610
$172,785
$669,792
$585,683
By segment: North America services (a)
$99,620
$87,110
$351,512
$321,619
International services (b)
$22,849
$17,986
$55,123
$42,068
Merchant services (c)
$31,399
$35,952
$134,872
$155,643
NetSpend (d)
$32,742
$31,737
$128,285
$66,353
Total revenues
$635,104
$583,103
$2,446,877
$2,064,305
Reimbursable items
(65,803)
(57,844)
(253,899)
(240,597)
Total segment revenues before reimbursable items
$569,301
$525,259
$2,192,978
$1,823,708
Intersegment revenues
5,975
3,121
21,224
12,549
By segment: North America services (e)
$255,539
$223,266
$954,082
$860,645
International services (f)
$92,895
$90,595
$341,785
$321,484
Merchant services (g)
$107,677
$110,375
$435,649
$446,278
NetSpend (h)
$119,165
$104,144
$482,686
$207,850
Adjusted segment operating margin:
North America services (a) / (e)
38.98%
39.02%
36.84%
37.37%
International services (b) / (f)
24.60%
19.85%
16.13%
13.09%
Merchant services (c) / (g)
29.16%
32.57%
30.96%
34.88%
NetSpend (d) / (h)
27.48%
30.47%
26.58%
31.92% |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Twelve
Months Ended
12/31/14������� 12/31/13
Percentage
Change
Three
Months Ended
12/31/14������� 12/31/13
Percentage
Change
Appendix: Non-GAAP Reconciliation �
Constant Currency
(1) Reflects current period results on a non-GAAP basis as if foreign currency
rates did not change from the comparable prior year period. (2) Reflects the
impact of calculated changes in foreign currency rates from the comparable period.
(in thousands)
Consolidated:
Constant Currency (1)
$638,111
$583,103
9.4%
$2,431,947
$2,064,305
17.8%
Foreign Currency (2)
(3,007)
---
14,930
---
Total Revenues
$635,104
$583,103
8.9%
$2,446,877
$2,064,305
18.5%
International Services:
Constant Currency (1)
$101,655
$96,129
5.7%
$348,595
$341,549
2.1%
Foreign Currency (2)
(3,005)
---
14,764
---
Total Revenues
$98,650
$96,129
2.6%
$363,359
$341,549
6.4%
26 |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Twelve
Months Ended
12/31/14������� 12/31/13
Percentage
Change
Three
Months Ended
12/31/14������ 12/31/13
Percentage
Change
Appendix: Non-GAAP Reconciliation �
Constant Currency
(1) Reflects current period results on a non-GAAP basis as if foreign currency
rates did not change from the comparable prior year period. (2) Reflects the
impact of calculated changes in foreign currency rates from the comparable period.
(in thousands)
27
Consolidated:
Constant Currency (1)
$572,166
$525,259
8.9%
$2,178,951
$1,823,708
19.5%
Foreign Currency (2)
(2,865)
---
14,027
---
Revenues before
reimbursable items
$569,301
$525,259
8.4%
$2,192,978
$1,823,708
20.2%
International Services:
Constant Currency (1)
$95,758
$90,595
5.7%
$327,923
$321,484
2.0%
Foreign Currency (2)
(2,863)
---
13,862
---
Revenues before
reimbursable items
$92,895
$90,595
2.5%
$341,785
$321,484
6.3% |
![]() Appendix: Non-GAAP Reconciliation �
EBITDA and Adjusted EBITDA
(in thousands)
28
Three Months Ended
Twelve Months Ended
Dec
2014
Dec
2013
Dec
2014
Dec
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
(751)
(48,655)
(2,055)
Deduct: Equity in Income of Equity
Investments
(5,751)
(3,691)
(17,583)
(13,047)
Add: Income Taxes
35,428
33,435
129,761
110,981
Add: Nonoperating expenses
8,516
10,472
38,711
30,024
Add: Depreciation and
amortization
63,191
61,268
246,620
199,026
EBITDA
$185,964
$170,126
$678,260
$581,526
Adjust for:
Add: Share-based compensation
7,771
9,345
30,790
28,933
Add: NetSpend� M&A expenses
3
1,626
3,217
13,634
Adjusted EBITDA
$193,738
$181,097
$712,267
$624,093
�2015 Total System Services, Inc.� Proprietary. All rights reserved worldwide. |
![]() �2015 Total
System Services, Inc.� Proprietary. All rights reserved worldwide.
Appendix: Non-GAAP Reconciliation �
Adjusted EPS
(in thousands)
29
Three Months Ended
Twelve Months Ended
Dec
2014
Dec
2013
Dec
2014
Dec
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 attributable to TSYS
common shareholders (net of taxes):
Acquisition intangible amortization
17,747
16,609
65,127
43,743
Share-based compensation
5,777
6,405
20,944
19,830
NetSpend M&A expenses
3
1,318
3,115
15,251
Adjusted earnings (b)
$106,725
$90,390
$364,402
$325,717
Average common shares outstanding and
participating securities (c)
185,221
189,447
186,222
188,389
Basic EPS Available to TSYS Common
Shareholders (a) / (c)
$0.45
$0.35
$1.48
$1.31
Adjusted EPS Available to TSYS Common
Shareholders (b) / (c)
$0.58
$0.48
$1.96
$1.73 |
![]() Appendix: Non-GAAP Reconciliation �
Free Cash Flow
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 Software
(41,502)
Additions to Contract Acquisition Costs
(88,871)
Free Cash Flow
$325,170
(in thousands)
30
�2016 Total System Services, Inc.� Proprietary. All rights reserved worldwide. |
![]() Appendix: 2015 Guidance Assumptions
The guidance assumes:
�
�
�
�
�
�
31
�2015 Total System Services, Inc.� Proprietary. All rights reserved worldwide. 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 rates
related to TSYS�
business;
TSYS will not incur significant expenses associated with the conversion of
new large clients other than included in the 2015 estimate, additional
acquisitions,
or
any
significant
impairment
of
goodwill
or
other
intangibles;
There will be no deconversions of large clients during the year;
No share repurchases are included; and
The economy will not worsen. |
![]() Appendix: Non-GAAP Reconciliation �
EBITDA and Adjusted EBITDA
Twelve Months
Ended
12/31/2014
Net Income
$329,406
Adjusted for:
Deduct: Discontinued operations
(48,655)
Deduct: Equity in Income of Equity Investments
(17,583)
Add: Income Taxes
129,760
Add: Nonoperating expense
38,711
Add: Depreciation and Amortization
246,620
EBITDA
$678,259
Adjust for: Share-based compensation
30,790
NetSpend M&A Operating Expenses*
3,217
Adjusted EBITDA
$712,266
(in thousands)
32
* Excludes share-based compensation
�2015 Total System Services, Inc.� Proprietary. All rights reserved worldwide. |
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