8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

October 22, 2013

Date of Report (Date of Earliest Event Reported)

Total System Services, Inc.

(Exact Name of Registrant as Specified in its Charter)

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)

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:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On October 22, 2013, Total System Services, Inc. (“Registrant”) issued a press release announcing financial results for the third quarter ended September 30, 2013. 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.

Item 7.01 Regulation FD Disclosure.

On October 22, 2013, Registrant will hold an investor conference call and webcast to discuss its financial results for the third quarter ended September 30, 2013. 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.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Registrant’s press release dated October 22, 2013
99.2	Registrant’s presentation dated October 22, 2013

2

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.

	TOTAL SYSTEM SERVICES, INC. (“Registrant”)
Dated: October 22, 2013	By:	/s/ Kathleen Moates
		Kathleen Moates
		Senior Deputy General Counsel

3

EX-99.1

Exhibit 99.1

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

shawnroberts@tsys.com

TSYS Reports Third Quarter 2013 Adjusted Cash EPS Increased 37.0%

COLUMBUS, Ga., October 22, 2013 — TSYS (NYSE: TSS) today reported results for the third quarter of 2013, which includes the operating results of our NetSpend acquisition that closed on July 1, 2013.

Summary of Third Quarter 2013 Financial Results Compared to 2012

• Total revenues were $588.1 million, an increase of 25.6%. Total revenues were impacted by a negative currency translation of $6.4 million.

• Revenues before reimbursable items were $527.0 million, an increase of 29.8%. Revenues before reimbursable items were impacted by a negative currency translation of $6.3 million.

• Adjusted EBITDA* was $182.1 million, an increase of 32.1%.

• Adjusted cash earnings per share (EPS)* were $0.49, an increase of 37.0%.

• On a GAAP basis, net income attributable to common shareholders was $64.4 million, an increase of 6.7%. Basic EPS was $0.34, an increase of 5.8%. Diluted EPS was $0.34, an increase of 5.5%.

* Note: Adjusted EBITDA and adjusted cash EPS are non-GAAP measures which are detailed later in this press release in the section “Reconciliation of GAAP to Non-GAAP Financial Measures.”

“This is the first quarter that NetSpend has been included in our consolidated financial statements and as our fourth operating segment. Their results were outstanding as revenues grew 22.2% over last year making a significant contribution to our overall results this quarter,” said Philip W. Tomlinson, chairman and chief executive officer of TSYS.

“Our free cash flow continues to be very strong. We applied over $60 million to reduce our debt as we move toward our goal of reducing our debt to EBITDA ratio. We will continue using cash to reduce debt over the next several quarters in anticipation of future acquisitions and share buybacks. Our balance sheet has grown to $3.8 billion as we continue our strategy of deploying capital to grow TSYS and maximize shareholder return,” said Tomlinson.

2013

TSYS Reports Third Quarter 2013 Adjusted Cash EPS Increased 37.0%/p. 2

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, October 22. 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

TSYS’ financial information includes 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 corresponding 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 and a reconciliation of those measures to the most directly comparable GAAP measures are included on pages 12 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^SM.” 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, Georgia, with local offices spread across the Americas, EMEA and Asia-Pacific. TSYS provides services to more than half of the top 20 international banks, and has been 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.

2013

TSYS Reports Third Quarter 2013 Adjusted Cash EPS Increased 37.0%/p. 3

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’ goal of reducing its debt to EBITDA ratio, anticipated uses of cash in the future, 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, TSYS’ ability to integrate NetSpend and other acquisitions and achieve the anticipated growth opportunities and other benefits of the acquisitions; the effect of current domestic and worldwide economic conditions; the material breach of security of any of TSYS’ systems; and risks associated with foreign operations, including adverse developments with respect to foreign currency exchange rates. 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 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013. 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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2013

TSYS Announces Third Quarter 2013 Earnings

Page 4 of 16

TSYS

Financial Highlights

(unaudited)

(in thousands, except per share data)

	Three Months Ended September 30,									Nine Months Ended September 30,
	2013			2012			Percent Change			2013			2012			Percent Change
Total revenues	$	588,074			468,059			25.6	%	$	1,531,513			1,391,872			10.0	%
Cost of services		394,641			315,685			25.0			1,032,856			946,612			9.1
Selling, general and administrative expenses		80,523			61,099			31.8			210,803			176,557			19.4
Merger and acquisition expenses		7,282			382			nm			12,009			882			nm
Operating income		105,628			90,893			16.2			275,845			267,821			3.0
Nonoperating income (expenses)		(545	)		(579	)		5.9			(147	)		(2,802	)		94.7
Merger and acquisition expenses - bridge loan facility & bonds		(9,789	)		—			na			(19,466	)		—			na
Income before income taxes, noncontrolling interests and equity in income of equity investments		95,294			90,314			5.5			256,232			265,019			(3.3	)
Income taxes		30,592			30,228			1.2			78,384			84,336			(7.1	)
Income before noncontrolling interests and equity in income of equity investments		64,702			60,086			7.7			177,848			180,683			(1.6	)
Equity in income of equity investments		2,792			1,957			42.7			9,357			6,983			34.0
Net income		67,494			62,043			8.8			187,205			187,666			(0.2	)
Net income attributable to noncontrolling interests		(3,144	)		(1,731	)		(81.6	)		(8,110	)		(4,248	)		(90.9	)
Net income attributable to TSYS common shareholders	$	64,350			60,312			6.7	%	$	179,095			183,418			(2.4	)%
Basic earnings per share (EPS)	$	0.34			0.32			5.8	%	$	0.95			0.97			(2.1	)%
Diluted EPS	$	0.34			0.32			5.5	%	$	0.94			0.97			(2.3	)%
Dividends declared per share	$	0.10			0.10					$	0.30			0.30
Non-GAAP measures:
Basic EPS excluding NetSpend M&A expenses, net of taxes	$	0.37			0.32			14.7	%	$	1.03			0.97			5.5	%
Adjusted cash EPS	$	0.49			0.36			37.0	%	$	1.25			1.09			14.7	%
Adjusted EBITDA	$	182,140			137,858			32.1	%	$	449,931			407,498			10.4	%

nm = not meaningful

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TSYS Announces Third Quarter 2013 Earnings

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TSYS

Consolidated Statements of Comprehensive Income

(unaudited)

(in thousands)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013		2012			2013			2012
Net income	$	67,494		62,043		$	187,205			187,666
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		7,222		9,999			(6,489	)		2,935
Postretirement healthcare plan adjustments		1,113		(1,537	)		1,423			(1,250	)
Unrealized gain on available-for-sale securities		1,479		—			1,479			—
Other comprehensive income (loss)		9,814		8,462			(3,587	)		1,685
Comprehensive income		77,308		70,505			183,618			189,351
Comprehensive income attributable to noncontrolling interests		3,228		1,709			6,149			3,844
Comprehensive income attributable to TSYS common shareholders	$	74,080		68,796		$	177,469			185,507

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TSYS Announces Third Quarter 2013 Earnings

Page 6 of 16

TSYS

Earnings Per Share

(unaudited)

(in thousands, except per share data)

	Three Months Ended					Three Months Ended					Nine Months Ended					Nine Months Ended
	September 30, 2013					September 30, 2012					September 30, 2013					September 30, 2012
	Common			Participating		Common			Participating		Common			Participating		Common			Participating
	Stock			Securities		Stock			Securities		Stock			Securities		Stock			Securities
Basic earnings per share:
Net income	$	64,350					60,312				$	179,095					183,418
Less income allocated to nonvested awards		(605	)		605		(191	)		191		(968	)		968		(613	)		613
Net income allocated to common stock for EPS calculation (a)	$	63,745			605		60,121			191	$	178,127			968		182,805			613
Average common shares outstanding (b)		187,726			1,799		187,269			609		187,001			1,034		187,911			642
Average common shares and participating securities		189,525					187,878					188,035					188,553
Basic earnings per share (a)/(b)	$	0.34			0.34		0.32			0.31	$	0.95			0.94		0.97			0.96
Diluted earnings per share:
Net income	$	64,350					60,312				$	179,095					183,418
Less income allocated to nonvested awards		(601	)		601		(191	)		191		(962	)		962		(611	)		611
Net income allocated to common stock for EPS calculation (c)	$	63,749			601		60,121			191	$	178,133			962		182,807			611
Average common shares outstanding		187,726			1,799		187,269			609		187,001			1,034		187,911			642
Increase due to assumed issuance of shares related to common equivalent shares outstanding		1,758					1,218					1,565					1,138
Average common and common equivalent shares outstanding (d)		189,484			1,799		188,487			609		188,566			1,034		189,049			642
Average common and common equivalent shares and participating securities		191,283					189,096					189,600					189,691
Diluted earnings per share (c)/(d)	$	0.34			0.33		0.32			0.31	$	0.94			0.93		0.97			0.95

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TSYS Announces Third Quarter 2013 Earnings

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TSYS

Segment Breakdown

(unaudited)

(in thousands)

	Three Months Ended September 30,												Nine Months Ended September 30,
							Change												Change
	2013			2012			$			%			2013			2012			$			%
Revenues before reimbursable items
North America Services	$	217,257			203,497			13,760			6.8	%	$	637,379			613,111			24,268			4.0	%
International Services		95,399			98,184			(2,785	)		(2.8	)		281,201			293,722			(12,521	)		(4.3	)
Merchant Services		113,650			107,786			5,864			5.4			335,903			303,842			32,061			10.6
NetSpend		103,706			—			103,706			na			103,706			—			103,706			na
Intersegment revenues		(3,001	)		(3,415	)		414			12.1			(9,429	)		(10,753	)		1,324			12.3
Revenues before reimbursable items from external customers	$	527,011			406,052			120,959			29.8	%	$	1,348,760			1,199,922			148,838			12.4	%
Total revenues
North America Services	$	252,577			237,625			14,952			6.3	%	$	741,005			717,781			23,224			3.2	%
International Services		100,548			102,691			(2,143	)		(2.1	)		295,731			306,466			(10,735	)		(3.5	)
Merchant Services		135,616			132,746			2,870			2.2			404,975			383,167			21,808			5.7
NetSpend		103,706			—			103,706			na			103,706			—			103,706			na
Intersegment revenues		(4,373	)		(5,003	)		630			12.6			(13,904	)		(15,542	)		1,638			10.5
Revenues from external customers	$	588,074			468,059			120,015			25.6	%	$	1,531,513			1,391,872			139,641			10.0	%
Depreciation and amortization
North America Services	$	18,764			18,582			182			1.0	%	$	55,060			55,856			(796	)		(1.4	)%
International Services		11,117			14,182			(3,066	)		(21.6	)		34,424			41,052			(6,628	)		(16.1	)
Merchant Services		2,890			2,889			0			0.0			9,030			9,385			(355	)		(3.8	)
NetSpend		1,471			—			1,471			na			1,471			—			1,471			na
Segment depreciation and amortization		34,241			35,654			(1,413	)		(4.0	)		99,984			106,293			(6,309	)		(5.9	)
Acquisition intangible amortization		24,731			6,919			17,812			nm			41,142			18,924			22,218			nm
Corporate admin and other		475			670			(195	)		(29.1	)		1,364			2,112			(748	)		(35.4	)
Total depreciation and amortization	$	59,447			43,243			16,204			37.5	%	$	142,490			127,329			15,161			11.9	%
Adjusted segment operating income
North America Services	$	82,274			70,080			12,194			17.4	%	$	229,373			210,658			18,715			8.9	%
International Services		10,729			8,244			2,485			30.1			26,448			22,842			3,606			15.8
Merchant Services		40,230			40,909			(679	)		(1.7	)		118,521			119,036			(515	)		(0.4	)
NetSpend		31,248			—			31,248			na			31,248			—			31,248			na
Total adjusted segment operating income		164,481			119,233			45,248			37.9			405,590			352,536			53,054			15.0
Acquisition intangible amorization		(24,731	)		(6,919	)		(17,812	)		nm			(41,142	)		(18,924	)		(22,218	)		nm
NetSpend M&A operating expenses (non-recurring)		(7,282	)		—			(7,282	)		na			(12,009	)		—			(12,009	)		na
Corporate admin and other		(26,840	)		(21,421	)		(5,419	)		(25.3	)		(76,594	)		(65,791	)		(10,803	)		(16.4	)
Operating income	$	105,628			90,893			14,735			16.2	%	$	275,845			267,821			8,024			3.0	%
Other:
Reimbursable items:
North America Services	$	35,320			34,128			1,192			3.5	%	$	103,626			104,670			(1,044	)		(1.0	)%
International Services		5,149			4,507			642			14.2			14,530			12,744			1,786			14.0
Merchant Services		21,966			24,960			(2,994	)		(12.0	)		69,072			79,325			(10,253	)		(12.9	)
NetSpend		—			—			—			na			—			—			—			na
Intersegment revenues		(1,372	)		(1,588	)		216			13.6			(4,475	)		(4,789	)		314			6.6
Reimbursable items	$	61,063			62,007			(944	)		(1.5	)%	$	182,753			191,950			(9,197	)		(4.8	)%

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TSYS Announces Third Quarter 2013 Earnings

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TSYS

Segment Breakdown

(unaudited)

(in thousands)

	At						Change
	9/30/2013			12/31/2012			$			%
Other:
Volumes:
FTEs (full-time equivalents)
North America Services		4,370			3,964			406			10.2	%
International Services		2,436			2,624			(188	)		(7.2	)
Merchant Services		1,617			1,242			375			30.2
NetSpend		462			—			462			na
Corporate Admin and Other		544			415			129			31.1
FTEs		9,429			8,245			1,184			14.4	%
Total assets (in thousands)
North America Services	$	3,279,829			1,744,877			1,534,952			88.0	%
International Services		399,368			445,642			(46,274	)		(10.4	)
Merchant Services		685,400			703,725			(18,325	)		(2.6	)
NetSpend		1,624,850			—			1,624,850			na
Intersegment assets		(2,234,561	)		(870,406	)		(1,364,155	)		nm
Total assets	$	3,754,886			2,023,838			1,731,048			85.5	%

	Three Months Ended September 30,										Nine Months Ended September 30,
					Change											Change
	2013		2012		Inc(Dec)			%			2013			2012		Inc(Dec)			%
North America Segment:
Accounts on File (AOF) (in millions)												461.4			413.4		48.0			11.6	%
Transactions (in millions)		2,395.8		2,036.6		359.2			17.6	%		6,644.2			5,907.7		736.5			12.5	%
International Segment:
AOF (in millions)												59.3			53.0		6.4			12.0	%
Transactions (in millions)		525.5		415.1		110.4			26.6	%		1,452.2			1,200.5		251.7			21.0	%
Merchant Segment:
Point-of-sale Transactions (in millions)		1,090.0		1,225.1		(135.1	)		(11.0	)%		3,325.2			3,724.5		(399.3	)		(10.7	)%
Dollar sales volume (in millions)	$	10,963.2	$	9,946.5	$	1,016.7			10.2	%	$	32,123.2		$	27,956.5	$	4,167			14.9	%
NetSpend Segment:
Gross Dollar Volume (in millions)	$	3,780.9	$	—	$	3,780.9			na		$	3,780.9		$	—	$	3,780.9			na
90-Day Active Cards (in thousands)												2,767.3			—		2,767.3			na
Direct Deposit 90-Day Active Cards (in thousands)												1,261.1			—		1,261.1			na
% of 90-Day Active Cards with Direct Deposit												45.6	%				45.6	%

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TSYS Announces Third Quarter 2013 Earnings

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TSYS

Balance Sheet

(unaudited)

(in thousands)

	Sep 30, 2013			Dec 31, 2012
Assets
Current assets:
Cash and cash equivalents	$	396,860			247,612
Restricted cash		530			282
Accounts receivable, net		261,595			247,083
Deferred income tax assets		14,604			9,825
Prepaid expenses and other current assets		86,993			69,924
Total current assets		760,582			574,726
Goodwill		1,545,784			518,344
Property and equipment, net		259,865			260,389
Computer software, net		320,928			226,917
Contract acquisition costs, net		173,840			161,267
Other intangible assets, net		500,870			130,054
Equity investments, net		89,964			87,764
Deferred income tax assets, net		5,843			5,334
Other assets		97,210			59,043
Total assets	$	3,754,886			2,023,838
Liabilities
Current liabilities:
Accounts payable	$	44,119			63,370
Current portion of borrowings		27,688			27,361
Current portion of obligations under capital leases		23,153			13,263
Accrued salaries and employee benefits		29,502			26,243
Other current liabilities		173,190			100,282
Total current liabilities		297,652			230,519
Long-term borrowings, excluding current portion		1,494,397			174,859
Deferred income tax liabilities		220,846			48,074
Obligations under capital leases, excluding current portion		10,322			17,155
Other long-term liabilities		67,417			68,791
Total liabilities		2,090,634			539,398
Redeemable noncontrolling interest		39,303			39,505
Equity
Shareholders’ equity:
Common stock		20,280			20,247
Additional paid-in capital		162,111			141,793
Accumulated other comprehensive income (loss), net		(220	)		1,408
Treasury stock		(248,998	)		(287,301	)
Retained earnings		1,671,595			1,549,063
Total shareholders’ equity		1,604,768			1,425,210
Noncontrolling interests in consolidated subsidiaries		20,181			19,725
Total equity		1,624,949			1,444,935
Total liabilities and equity	$	3,754,886			2,023,838

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TSYS Announces Third Quarter 2013 Earnings

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TSYS

Cash Flow

(unaudited)

(in thousands)

	Nine Months Ended September 30,
	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	187,205			187,666
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income of equity investments		(9,357	)		(6,983	)
Dividends received from equity investments		8,595			7,523
Net loss on foreign currency translation		612			2,259
Depreciation and amortization		142,490			127,329
Amortization of debt issuance costs		6,775			180
Amortization of bond discount		131			—
Changes in fair value of private equity investments		(1,227	)		—
Share-based compensation		19,587			12,348
Excess tax benefit from share-based payment arrangements		(2,727	)		(1,236	)
Provisions for bad debt expense and billing adjustments		2,193			813
Charges for transaction processing provisions		8,545			1,348
Provision for fraud and other losses		6,398			—
Deferred income tax expense		25,784			(2,355	)
Loss on disposal of equipment, net		78			77
Changes in operating assets and liabilities:
Restricted cash		(132	)		—
Accounts receivable		(6,721	)		1,730
Prepaid expenses, other current assets and other long-term assets		(12,478	)		4,406
Accounts payable		(41,055	)		6,688
Accrued salaries and employee benefits		(9,552	)		(13,567	)
Other current liabilities and other long-term liabilities		(17,659	)		5,761
Net cash provided by operating activities		307,486			333,987
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net		(24,897	)		(24,296	)
Additions to licensed computer software from vendors		(34,412	)		(19,385	)
Additions to internally developed computer software		(22,519	)		(15,202	)
Cash used in acquisitions, net of cash acquired		(1,314,660	)		(66,250	)
Purchase of private equity investments		(1,146	)		(2,370	)
Additions to contract acquisition costs		(36,824	)		(25,700	)
Net cash used in investing activities		(1,434,457	)		(153,203	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term borrowings and capital lease obligations		(82,644	)		(188,395	)
Proceeds from borrowings of long-term borrowings		1,395,661			158,633
Proceeds from exercise of stock options		27,488			9,451
Excess tax benefit from share-based payment arrangements		2,727			1,236
Repurchase of common stock under plans and tax withholding		(6,267	)		(61,556	)
Debt issuance costs		(13,471	)		(1,996	)
Subsidiary dividends paid to noncontrolling shareholders		(5,897	)		(2,797	)
Dividends paid on common stock		(37,514	)		(56,719	)
Net cash provided by (used in) financing activities		1,280,082			(142,143	)
CASH AND CASH EQUIVALENTS:
Effect of exchange rate changes on cash and cash equivalents		(3,862	)		1,591
Net increase in cash and cash equivalents		149,248			40,232
Cash and cash equivalents at beginning of period		247,612			316,337
Cash and cash equivalents at end of period	$	396,860			356,569

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TSYS Announces Third Quarter 2013 Earnings

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Supplemental Information:

	Accounts on File
	Total
(in millions)	September 2013		September 2012		% Change
Consumer Credit		224.2		195.0		15.0
Retail		26.8		24.1		11.2
Total Consumer		251.0		219.1		14.6
Commercial		38.9		36.3		7.2
Other		16.9		11.1		52.5
Subtotal		306.7		266.4		15.1
Prepaid/Stored Value		110.7		114.3		(3.1	)
Government Services		61.6		48.8		26.2
Commercial Card Single Use		41.6		36.8		13.0
Total AOF		520.7		466.4		11.7

Growth in Accounts on File (in millions):

	September 2012 to September 2013			September 2011 to September 2012
Beginning balance		466.4			392.4
Change in accounts on file due to:
Internal growth of existing clients		36.5			30.3
New clients		63.8			75.5
Purges/Sales		(45.4	)		(29.0	)
Deconversions		(0.6	)		(2.8	)
Ending balance		520.7			466.4

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TSYS Announces Third Quarter 2013 Earnings

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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 year-to-date 2013 financial results using the previous year’s foreign currency exchange rates. On a year-to-date constant currency basis, TSYS’ total revenues grew 11.2% as compared to a reported GAAP increase of 10.0%.

The schedule below also provides a reconciliation of basic EPS, excluding merger and acquisition costs, net of taxes, to basic EPS, and operating income, excluding merger and acquisition costs, to operating income. On a year-to-date basis, TSYS’ basic EPS excluding merger and acquisition costs grew 5.5% as compared to a reported GAAP decrease of 2.1%.

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 cash EPS.

The schedule below also provides a reconciliation of segment operating income, adjusted for the impact of acquisition intangible amortization.

The schedule also provides a reconciliation of net income, adjusted for 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 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 Third Quarter 2013 Earnings

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Reconciliation of GAAP to Non-GAAP

Constant Currency Comparison

(unaudited)

(in thousands)

	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2012		Percent Change			2013			2012		Percent Change
Consolidated
Constant currency (1)	$	594,470			468,059		27.0	%	$	1,548,296			1,391,872		11.2	%
Foreign currency (2)		(6,396	)		—					(16,783	)		—
Total revenues	$	588,074			468,059		25.6	%	$	1,531,513			1,391,872		10.0	%
Constant currency (1)	$	533,297			406,052		31.3	%	$	1,365,215			1,199,922		13.8	%
Foreign currency (2)		(6,286	)		—					(16,455	)		—
Total revenues before reimbursable items	$	527,011			406,052		29.8	%	$	1,348,760			1,199,922		12.4	%
Constant currency (1)	$	106,459			90,893		17.1	%	$	277,856			267,821		3.7	%
Foreign currency (2)		(831	)		—					(2,011	)		—
Operating income	$	105,628			90,893		16.2	%	$	275,845			267,821		3.0	%
International Services
Constant currency (1)	$	107,050			102,691		4.2	%	$	312,715			306,466		2.0	%
Foreign currency (2)		(6,502	)		—					(16,984	)		—
Total revenues	$	100,548			102,691		(2.1	)%	$	295,731			306,466		(3.5	)%

(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 September 30,							Nine Months Ended September 30,
	2013		2012		Percent Change			2013		2012		Percent Change
Total Revenues	$	588,074		468,059		25.6	%	$	1,531,513		1,391,872		10.0	%
Reimbursable Items		61,063		62,007		(1.5	)		182,753		191,950		(4.8	)
Revenues Before Reimbursable Items	$	527,011		406,052		29.8	%	$	1,348,760		1,199,922		12.4	%

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TSYS Announces Third Quarter 2013 Earnings

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Reconciliation of GAAP to Non-GAAP

Operating Income and Basic EPS Excluding Merger and Acquisition Costs (M&A)

(unaudited)

(in thousands, except per share data)

	Three Months Ended September 30,							Nine Months Ended September 30,
	2013		2012		Percent Change			2013		2012		Percent Change
Operating income	$	105,628		90,893		16.2	%	$	275,845		267,821		3.0	%
Add: NetSpend M&A operating expenses (non-recurring)		7,282		—		na			12,009		—		na
Operating income excluding merger and acquisition costs	$	112,910		90,893		24.2	%	$	287,854		267,821		7.5	%
	2013		2012		Percent Change			2013		2012		Percent Change
Net income attributable to TSYS common shareholders (a)	$	64,350		60,312		6.7	%	$	179,095		183,418		(2.4	)%
Add: NetSpend M&A expenses, net of taxes* (non-recurring)		5,424		—		na			13,934		—		na
Net income attributable to TSYS common shareholders (c)	$	69,774		60,312		15.7	%	$	193,029		183,418		5.2	%
Average common shares outstanding (b)		189,525		187,878					188,035		188,553
Basic earnings per share (a)/(b)	$	0.34		0.32		5.8	%	$	0.95		0.97		(2.1	)%
Basic earnings per share excluding merger and acquisition expenses (c)/(b)	$	0.37		0.32		14.7	%	$	1.03		0.97		5.5	%

* - Certain merger and acquisition costs are nondeductible for income tax purposes

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TSYS Announces Third Quarter 2013 Earnings

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Reconciliation of GAAP to Non-GAAP

Adjusted Cash Earnings

(unaudited)

(in thousands, except per share data)

	Three Months Ended September 30,							Nine Months Ended September 30,
	2013		2012		Percent Change			2013		2012		Percent Change
Net income attributable to TSYS common shareholders (a)	$	64,350		60,312		6.7	%	$	179,095		183,418		(2.4	)%
Adjust for amounts attributable to TSYS common shareholders:
Add: Acquisition intangible amortization, net of taxes	$	16,420		4,383		nm		$	27,532		12,746		nm
Add: Share-based compensation, net of taxes		6,635		2,489		nm			13,622		8,480		60.6	%
Cash earnings		87,405		67,184		30.1	%		220,250		204,644		7.6	%
Add: NetSpend M&A expenses, net of taxes* (non-recurring)		5,424		—		na			13,934		—		na
Cash earnings adjusted	$	92,829		67,184		38.2	%	$	234,184		204,644		14.4	%
Basic EPS - Net income attributable to TSYS Common Shareholders
As reported (GAAP)	$	0.34		0.32				$	0.95		0.97
Adjust for amounts attributable to TSYS common shareholders:
Add: Acquisition intangible amortization, net of taxes		0.09		0.02					0.15		0.07
Add: Share-based compensation, net of taxes		0.04		0.01					0.07		0.05
Cash earnings per share		0.46		0.36					1.17		1.09
Add: NetSpend M&A expenses, net of taxes* (non-recurring)		0.03		—					0.07		—
Adjusted cash EPS **	$	0.49		0.36				$	1.25		1.09
Average common shares and participating securities		189,525		187,878					188,035		188,553

* Certain merger and acquisition costs are nondeductible for income tax purposes

** Adjusted cash EPS amounts may not total due to rounding.

Adjusted EBITDA

(unaudited)

(in thousands)

	Three Months Ended September 30,							Nine Months Ended September 30,
Net income	$	67,494		62,043		8.8	%	$	187,205		187,666		(0.2	)%
Adjust for:
Deduct: Equity in income of equity investments		(2,792	)	(1,957	)	(42.7	)%		(9,357	)	(6,983	)	(34.0	)%
Add: Income taxes		30,592		30,228		1.2	%		78,384		84,336		(7.1	)%
Add: Nonoperating expense		10,334		579		nm			19,613		2,802		nm
Add: Depreciation and amortization		59,447		43,243		37.5	%		142,490		127,329		11.9	%
EBITDA		165,075		134,136		23.1	%		418,335		395,150		5.9	%
Adjust for:
Add: Share-based compensation		9,784		3,722		nm			19,587		12,348		58.6	%
Add: NetSpend M&A operating expenses (non-recurring)		7,282		—		na			12,009		—		na
Adjusted EBITDA	$	182,140		137,858		32.1	%	$	449,931		407,498		10.4	%

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TSYS Announces Third Quarter 2013 Earnings

Page 16 of 16

Reconciliation of GAAP to Non-GAAP

Adjusted Segment Operating Income

(unaudited)

(in thousands)

	Three Months Ended												Nine Months Ended
	Mar 31, 2013			Jun 30, 2013			Sep 30, 2013						Sep 30, 2013
Adjusted segment operating income
North America Services	$	67,202		$	79,896		$	82,274					$	229,373
International Services		7,147			8,572			10,729						26,448
Merchant Services		37,338			40,953			40,230						118,521
NetSpend		—			—			31,248						31,248
Total adjusted segment operating income		111,688			129,421			164,481						405,590
Adjust for:
Acquisition intangible amortization		(8,532	)		(7,879	)		(24,731	)					(41,142	)
NetSpend M&A operating expenses (non-recurring)		(3,481	)		(1,246	)		(7,282	)					(12,009	)
Corporate administration and other		(24,772	)		(24,982	)		(26,840	)					(76,594	)
Operating income	$	74,903		$	95,314		$	105,628					$	275,845
	Three Months Ended												Nine Months Ended			YTD
	Mar 31, 2012			Jun 30, 2012			Sep 30, 2012			Dec 31, 2012			Sep 30, 2012			Dec 31, 2012
Adjusted segment operating income
North America Services	$	68,347		$	72,231		$	70,080		$	78,835		$	210,658		$	289,493
International Services		4,637			9,962			8,244			6,584			22,843			29,427
Merchant Services		39,684			38,443			40,909			37,248			119,036			156,284
NetSpend		—			—			—			—			—			—
Total adjusted segment operating income		112,668			120,635			119,233			122,667			352,537			475,203
Adjust for:
Acquisition intangible amortization		(5,989	)		(6,015	)		(6,919	)		(7,340	)		(18,924	)		(26,264	)
NetSpend M&A operating expenses (non-recurring)		—			—			—			—			—			—
Corporate administration and other		(21,848	)		(22,524	)		(21,421	)		(25,495	)		(65,792	)		(91,287	)
Operating income	$	84,831		$	92,096		$	90,893		$	89,831		$	267,821		$	357,652

Segment Depreciation and Amortization

(unaudited)

(in thousands)

	Three Months Ended								Nine Months Ended
	Mar 31, 2013		Jun 30, 2013		Sep 30, 2013				Sep 30, 2013
Depreciation and amortization
North America Services	$	18,083	$	18,213	$	18,764			$	55,060
International Services		12,331		10,976		11,117				34,424
Merchant Services		3,142		2,998		2,890				9,030
NetSpend		—		—		1,471				1,471
Segment depreciation and amortization		33,555		32,188		34,241				99,984
Acquisition intangible amortization		8,532		7,879		24,731				41,142
Corporate administration and other		410		479		475				1,364
Total depreciation and amortization	$	42,498	$	40,546	$	59,447			$	142,490
	Three Months Ended								Nine Months Ended		YTD
	Mar 31, 2012		Jun 30, 2012		Sep 30, 2012		Dec 31, 2012		Sep 30, 2012		Dec 31, 2012
Depreciation and amortization
North America Services	$	18,453	$	18,821	$	18,582	$	18,816	$	55,856	$	74,673
International Services		12,387		14,483		14,182		13,980		41,052		55,033
Merchant Services		3,320		3,175		2,889		2,699		9,385		12,083
NetSpend		—		—		—		—		—		—
Segment depreciation and amortization		34,160		36,479		35,654		35,495		106,293		141,789
Acquisition intangible amortization		5,989		6,015		6,919		7,340		18,924		26,264
Corporate administration and other		723		719		669		446		2,112		2,558
Total depreciation and amortization	$	40,873	$	43,213	$	43,243	$	43,281	$	127,329	$	170,610

- ### -

EX-99.2

2013 Third Quarter and YTD Results

October 22, 2013

©

2013

Total

System

Services,

Inc.®

Proprietary.

All

rights

reserved

worldwide.

Exhibit 99.2

Forward-Looking Statements

This presentation and comments made by management contain forward-

looking statements including, among others, statements regarding

the

expected future operating results of TSYS.  These statements are

based on

management’s current expectations and assumptions and are subject 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 2012 Annual Report on Form 10-K,

Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.  TSYS

does not assume any obligation to update any forward-looking statements as

a result of new information, future developments or otherwise.

2

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Use of Non-GAAP Financial Measures

This slide presentation contains certain non-GAAP financial measures

determined by methods other than in accordance with generally accepted

accounting principles. Such non-GAAP financial measures include the

following: revenues before reimbursable items; operating margin excluding

reimbursable items; revenues measured on a constant currency basis; free

cash flow; EBITDA, adjusted EBITDA , adjusted cash 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.

3

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Phil Tomlinson

Chairman and Chief Executive Officer

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Troy Woods

President & Chief Operating Officer

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

3Q 2013 North America Segment Highlights

6

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

(1)

Includes Credit, Debit,

Retail, Prepaid & Loyalty

(2)

Includes Healthcare

Improving Revenue Growth

Operating Income up 17.4%

Margin Expansion: up 343 BPS over 3Q12

Shifting Conversion Pipeline

(*) Revenues Before Reimbursable Items

Segment Revenue by Line of Business*

Adjusted Segment Operating Income 

Operating Margin

Segment Revenue*

YOY Growth %

3Q 2013 North America Segment Highlights

7

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

(*)

Growth

Excluding

Prepaid,

Government

Services

and

Single

Use

Accounts

*

Eleventh Straight Quarter of Account On File YOY Growth

Fourteenth Straight Quarter of Transaction YOY Growth

Same Client Transactions up 15.2%: Sixteenth Straight Quarter of

YOY Growth

15.0%

12.1%

9.5%

12.7%

7.8%

11.5%

17.6%

Accounts on File

YOY Growth %

Transaction Volume

YOY Growth %

3Q 2013 International Segment Highlights

8

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Revenue $95.4M* –

down 2.8%

–

Up 3.7% on Constant Currency

Currency Headwinds Continue: Q3 $6.4M* YTD $16.7M*

Margin Expansion Continues

Growth Through Greater Product and

Market Penetration

Expansion of Debit Processing

(*) Revenues Before Reimbursable Items

Segment Revenue by Region*

Segment Revenue*

YOY Growth %

Adjusted Segment Operating Income

Operating Margin

3Q 2013 International Segment Highlights

9

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Record Number Accounts Processed

Double-digit Transaction Growth

Same Client Transaction Growth 11.7%

Accounts on File

YOY Growth %

Transaction Volume

YOY Growth %

3Q 2013 Merchant Segment Highlights

Growth in Direct Business Overpowered

by Indirect Business

Acquisitions Performing Well

Sales Productivity on the Rise

Back-end Integration on Schedule

–

Successful Pilot

(*) Revenues Before Reimbursable Items

©2013 Total System Services, Inc.®

Confidential and proprietary. All rights reserved worldwide.

10

Direct

Indirect

Segment Revenue*

YOY Growth %

Adjusted Segment Operating Income

Operating Margin

3Q 2013 Merchant Segment Highlights

Indirect Faces Headwinds Due to Consolidation Within the Market

Direct Faces Headwinds Due to Price Compression

POS Transactions Increased 3.9%, Excluding Deconverted Accounts

Continued Record SBS Sales Volume

©2013 Total System Services, Inc.®

Confidential and proprietary. All rights reserved worldwide.

11

(excl. ProPay)

(excl. BAMS)

(*) Excludes Managed Accounts and ProPay

SBS Sales Volume*

YOY Growth %

($ in millions)

YOY Growth Rate of Revenue

Adjusted Segment Operating Income

Operating Margin*

Segment Revenue

YOY Growth %

3Q 2013 NetSpend Segment Highlights

12

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

($ in millions)

Revenue $103.7M –

up 22.2%

Significant Sequential Quarter Margin Expansion

Added 1k+ Retail Locations

Added 75+ New PayCard Clients

($ in millions)

(*)

Operating Income Excluding Amortization of Acquisition Intangibles, M&A Costs and

Non-recurring Items, and beginning in 3Q13 also excludes corporate administrative expenses

3Q13 Adjusted Operating Income represents NetSpend Segment Op. Inc.

13

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

3Q 2013 NetSpend Segment Highlights

Gross Dollar Volume

YOY Growth %

30.1%

42.8%

18.2%

17.9 %

17.1%

18.4%

Direct Deposit Active Cards

YOY Growth %

42.3%

66.7%

25.1%

24.8%

24.2%

22.9%

Direct Deposit Active Cards up 23.8%

Gross Dollar Volume (GDV) up 22.4%

(in thousands)

($ in millions)

23.8 %

22.4%

Jim Lipham

Chief Financial Officer

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Consolidated Selected Financial Highlights

15

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

$588,074

$468,059

25.6%

Total Revenues

$1,531,513

$1,391,872

10.0%

527,011

406,052

29.8

Revenues Before Reimbursable Items

1,348,760

1,199,922

12.4

105,628

90,893

16.2

Operating Income

275,845

267,821

3.0

64,350

60,312

6.7

Net Income Attributable to TSYS

Common Shareholders

179,095

183,418

(2.4)

Basic Earnings Per Share (EPS)

Attributable to TSYS Common

Shareholders:

$0.34

$0.32

5.8

As Reported (GAAP)

$0.95

$0.97

(2.1)

$0.37

$0.32

14.7

Excluding M&A expenses

$1.03

$0.97

5.5

$0.49

$0.36

37.0

Adjusted Cash EPS*

$1.25

$1.09

14.7

$182,140

$137,858

32.1

Adjusted EBITDA*

$449,931

$407,498

10.4

YTD

2013

YTD

2012

Percent

Change

(in thousands, except per share data)

3

rd

Qtr

2013

3

rd

Qtr

2012

Percent

Change

(*) Adjusted Cash EPS and Adjusted EBITDA definitions are contained in Appendix

2013 YTD Revenue Change

Revenues Before Reimbursable Items

16

©2013

Total

System

Services,

Inc.®

Proprietary.

All

rights

reserved

worldwide.

15%

20%

5%

0%

5.5%

Internal

Growth

New

Clients

3.1%

Acquisitions

Lost

Business

(5.0%)

Non-recurring

Items

(0.7%)

Price

Compression

(2.1%)

(7.8%)

Reported

12.4%

Currency

(1.4%)

13.0%

10%

Consumer Credit

224.2

195.0

15.0

224.2

208.6

7.4

Retail

26.8

24.1

11.2

26.8

25.9

3.6

Total Consumer

251.0

219.1

14.6

251.0

234.5

7.0

Commercial

38.9

36.3

7.2

38.9

38.6

0.8

Other

16.9

11.1

52.5

16.9

15.3

10.2

Subtotal

306.7

266.4

15.1

306.7

288.4

6.4

Prepaid /

Stored Value

110.7

114.3

(3.1)

110.7

102.8

7.7

Government

Services

61.6

48.8

26.2

61.6

60.6

1.7

Commercial Card

Single Use

41.6

36.8

13.0

41.6

37.0

12.5

Total AOF

520.7

466.4

11.7

520.7

488.8

6.5

Consolidated Accounts on File Portfolio Summary

(in millions)

Sep

2013

Sep

2012

%

Change

Sep

2013

Jun

2013

%

Change

17

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Cash Flow Strength:

2013 TTM Consolidated Financial Highlights

18

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

TTM = Trailing Twelve Months

(in millions)

$589

$429

$277

$249

$397

$0

$75

$150

$225

$300

$375

$450

$525

$600

$675

Adjusted EBITDA

Cash flow from operations

Free cash flow

Net income

Ending cash

Debt to EBITDA Ratio

7/1/2013*

9/30/2013

DEBT

$1,618

$1,556

EBITDA (ex. 1-times)

618

635

EBITDA Multiple

2.62x

2.45x

(in millions)

19

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

* June 30, 2013 plus $300M draw

Trailing Twelve Months

(TSYS + NetSpend)

Q&A

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Appendix

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Appendix: Non-GAAP Items –

Adjusted EBITDA and

Adjusted Cash 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 other non-recurring items.

•

Adjusted cash EPS is adjusted cash earnings divided by weighted average shares outstanding used for basic EPS calculations. Adjusted

cash earnings is net income excluding the after-tax impact of stock-based compensation expenses, amortization of acquisition intangibles,

and other non-recurring items.

•

Adjusted segment operating income is operating income at the segment level adjusted for acquisition intangible amortization.

•

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 cash 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

cash

EPS

as

supplemental

measures

to

evaluate

the

overall

operating

performance

of

companies.

•

By comparing the Company’s adjusted EBITDA and adjusted cash 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.

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

22

Appendix: Non-GAAP Reconciliation –

Revenues Before Reimbursable Items

Total Revenues

$588,074

$468,059

$1,531,513

$1,391,872

Reimbursable Items

61,063

62,007

182,753

191,950

Revenues Before Reimbursable Items

$527,011

$406,052

$1,348,760

$1,199,922

(in thousands)

23

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Three Months Ended

Nine Months Ended

9/30/13

9/30/13

9/30/12

9/30/12

Appendix: Non-GAAP Reconciliation –

Adjusted

Segment Operating Income and Operating Margin

Operating income

$105,628

$90,893

$275,845

$267,821

Less: acquisition intangible amort

(24,731)

(6,919)

(41,142)

(18,924)

Less: Corporate admin and other

(34,122)

(21,421)

(88,603)

(65,791)

Total segment adjusted operating income

$164,481

$119,233

$405,590

$352,536

By segment: North America services (a)

$82,274

$70,080

$229,373

$210,658

International services (b)

$10,729

$8,244

$26,448

$22,842

Merchant services (c)

$40,230

$40,909

$118,521

$119,036

NetSpend (d)

$31,248

$ --

$31,248

$ --

Total revenues

$588,074

$468,059

$1,531,513

$1,391,872

Reimbursable items

(61,063)

(62,007)

(182,753)

(191,950)

Total segment revenues before reimbursable items

$527,011

$406,052

$1,348,760

$1,199,922

Intersegment revenues

(4,373)

(5,003)

(13,904)

(15,542)

By segment: North America services (e)

$217,257

$203,497

$637,379

$613,111

International services (f)

$95,399

$98,184

$281,201

$293,722

Merchant services (g)

$113,650

$107,786

$335,903

$303,842

NetSpend (h)

$103,706

$ --

$103,706

$ --

Adjusted segment operating margin:

North America services (a) / (e)

37.87%

34.44%

35.99%

34.36%

International services (b) / (f)

11.25%

8.40%

9.41%

7.78%

Merchant services (c) / (g)

35.40%

37.95%

35.28%

39.18%

NetSpend (d) / (h)

30.13%

na

30.13%

na

(in thousands)

24

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Three Months Ended

Nine Months Ended

9/30/13

9/30/12

9/30/13

9/30/12

Nine

Months Ended

9/30/13        9/30/12

Percentage

Change

Three

Months Ended

9/30/13        9/30/12

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)

$594,470

$468,059

27.0%

$1,548,296

$1,391,872

11.2%

Foreign Currency (2)

(6,396)

---

(16,783)

---

Total Revenues

$588,074

$468,059

25.6%

$1,531,513

$1,391,872

10.0%

International Services:

Constant Currency (1)

$107,050

$102,691

4.2%

$312,715

$306,466

2.0%

Foreign Currency (2)

(6,502)

---

(16,984)

---

Total Revenues

$100,548

$102,691

(2.1%)

$295,731

$306,466

(3.5%)

25

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Nine

Months Ended

9/30/13        9/30/12

Percentage

Change

Three

Months Ended

9/30/13        9/30/12

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)

$533,297

$406,052

31.3%

$1,365,215

$1,199,922

13.8%

Foreign Currency (2)

(6,286)

---

(16,455)

---

Revenues before

reimbursable items

$527,011

$406,052

29.8%

$1,348,760

$1,199,922

12.4%

International Services:

Constant Currency (1)

$101,790

$98,184

3.7%

$297,857

$293,722

1.4%

Foreign Currency (2)

(6,391)

---

(16,657)

---

Revenues before

reimbursable items

$95,399

$98,184

(2.8%)

$281,200

$293,722

(4.3%)

26

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Appendix: Non-GAAP Reconciliation –

EBITDA and Adjusted EBITDA

(in thousands)

27

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Three Months Ended

Nine Months Ended

Sep

2013

Sep

2012

Sep

2013

Sep

2012

Net income :

As reported (GAAP) (a)

$67,494

$62,043

$187,205

$187,666

Adjusted for:

Deduct: Equity in Income of Equity

Investments

(2,792)

(1,957)

(9,357)

(6,983)

Add: Income Taxes

30,592

30,228

78,384

84,336

Add: Nonoperating expenses

10,334

579

19,613

2,802

Add: Depreciation and

amortization

59,447

43,243

142,490

127,329

EBITDA

$165,075

$134,136

$418,335

$

395,150

Adjust for:

Add: Share-based compensation

9,784

3,722

19,587

12,348

Add: NetSpend  M&A expenses

7,282

--

12,009

--

Adjusted EBITDA

$182,140

$137,858

$449,931

$407,498

Appendix: Non-GAAP Reconciliation –

Adjusted Cash EPS

(in thousands)

28

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Three Months Ended

Nine Months Ended

Sep

2013

Sep

2012

Sep

2013

Sep

2012

Net income Available to TSYS Common

Shareholders:

As reported (GAAP) (a)

$64,350

$60,312

$179,095

$183,418

Adjusted for amounts attributable to TSYS

common shareholders (net of taxes):

Acquisition intangible amortization

16,420

4,383

27,532

12,746

Share-based compensation

6,635

2,489

13,622

8,480

Cash earnings

$87,405

$67,184

$220,250

$204,644

NetSpend M&A expenses (nonrecurring)

5,424

--

13,934

--

Adjusted cash earnings (b)

$92,829

$67,184

$234,184

$204,644

Average common shares outstanding and

participating securities (c)

189,525

187,878

188,035

188,553

Basic EPS Available to TSYS Common

Shareholders (a) / (c)

$0.34

$0.32

$0.95

$0.97

Adjusted cash EPS Available to TSYS Common

Shareholders

(b) / (c)

$0.49

$0.36

$1.25

$1.09

Appendix: Non-GAAP Reconciliation –

EBITDA and Adjusted EBITDA

Trailing Twelve

Months Ended

9/30/2013

Net Income

$249,461

Adjusted for:

Deduct: Equity in Income of Equity Investments

(12,544)

Add: Income Taxes

109,151

Add: Nonoperating expense

19,608

Add: Depreciation and Amortization

185,771

EBITDA

$551,447

Adjust for: Share-based compensation

25,860

NetSpend M&A Operating Expenses

12,009

Adjusted EBITDA

$589,316

(in thousands)

29

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Appendix: Non-GAAP Reconciliation –

Free Cash Flow

Trailing Twelve

Months Ended

9/30/2013

Cash Flows from Operating Activities

$429,249

Less:

Purchase of Property and Equipment

(31,996)

Additions to Licensed Computer Software from Vendors

(48,027)

Additions to Internally Developed Computer Software

(26,601)

Additions to Contract Acquisition Costs

(45,509)

Free Cash Flow

$277,115

(in thousands)

30

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Mar 31,

2013

Dec 31,

2012

Jun 30,

2012

Jun 30,

2013

Sep 30,

2012

Appendix: Non-GAAP Reconciliation –

NetSpend

Adjusted Operating Income

Mar 31,

2012

Operating income (loss) (GAAP)

($8,964)

$17,430

$7,869

$17,594

$18,332

$15,799

Adjusted for:

Add: Amortization of acquisition

intangibles

881

534

446

434

590

431

Add: Settlement (gains) and

other losses

25,315

1,533

10,300

(160)

48

3,423

Add: M&A expenses

--

--

--

--

2,656

3,219

Adjusted operating income

$17,232

$19,497

$18,615

$17,868

$21,626

$22,872

(in thousands)

31

©2013 Total System Services, Inc.®

Proprietary. All rights reserved worldwide.

Three Months Ended