EX-99.1 2 d915310dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

 

LOGO

 

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 First Quarter Adjusted EPS Grew 41.2%

Revises 2015 Adjusted EPS Guidance Growth to 12-14%

COLUMBUS, Ga., Apr. 28, 2015 — TSYS (NYSE: TSS) today reported results for the first quarter.

“Through diligent planning and execution, along with the extraordinary efforts of many to complete the largest credit card portfolio conversion in the history of payments, we delivered exceptional results for the first quarter,” said M. Troy Woods, chairman, president and chief executive officer of TSYS.

Highlights for the first quarter of 2015 include:

 

    Adjusted earnings per share (EPS) from continuing operations were $0.54, an increase of 41.2%. On a GAAP basis, basic EPS from continuing operations were $0.42, an increase of 60.4%.

 

    Income from continuing operations attributable to TSYS’ shareholders was $77.8 million, an increase of 57.7%.

 

    Adjusted EBITDA was $193.5 million, an increase of 29.3%.

 

    Total revenues for the quarter were $662.2 million, an increase of 11.7%. Revenues before reimbursable items were $595.8 million, an increase of 11.8%.

 

    Adjusted operating margin was 25.9%. GAAP operating margin was 18.5%.

“During the quarter, we repurchased 1.45 million shares of our stock, and including dividends, we returned 73% of available free cash flow to our shareholders. As a result of the great start to the year, we are revising our adjusted EPS guidance to grow between 12-14% from the previous range of 11-13%,” said Woods.

 

     2015 Revised Financial Outlook  
     Range         
     (in millions, except per
share amounts)
     Percent
Change
 

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*

   $ 2.19         to       $ 2.23         12     to         14

* Average Basic Weighted Shares

     185              

 

1


LOGO

 

TSYS Reports First Quarter Adjusted EPS Grew 41.2%

In other business, M. Troy Woods has assumed the position of chairman, to succeed Philip W. Tomlinson, who will continue to serve as a director.

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, April 28. 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 8 to 11 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 has been named one of the 2015 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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LOGO

 

TSYS Reports First Quarter Adjusted EPS Grew 41.2%

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’ revised 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.

— more —

 

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TSYS Announces First Quarter 2015 Earnings

Page 4 of 11

 

 

TSYS

Financial Highlights

(unaudited)

(in thousands, except per share data)

 

 

     Three Months Ended
March 31,
 
     2015     2014     Percent
Change
 

Total revenues

   $ 662,156        592,848        11.7

Cost of services

     449,705        422,883        6.3   

Selling, general and administrative expenses

     89,955        89,268        0.8   
  

 

 

   

 

 

   

Total expenses

  539,660      512,151      5.4   
  

 

 

   

 

 

   

Operating income

  122,496      80,697      51.8   

Nonoperating expenses

  (9,209   (9,813   6.2   
  

 

 

   

 

 

   

Income before income taxes, noncontrolling interests and equity in income of equity investments

  113,287      70,884      59.8   

Income taxes

  39,782      24,335      63.5   
  

 

 

   

 

 

   

Income before noncontrolling interests and equity in income of equity investments

  73,505      46,549      57.9   

Equity in income of equity investments, net of tax

  5,394      4,096      31.7   
  

 

 

   

 

 

   

Income from continuing operations, net of tax

  78,899      50,645      55.8   

Gain (Loss) from discontinued operations, net of tax

  —        980      nm   
  

 

 

   

 

 

   

Net income

  78,899      51,625      52.8   

Net income attributable to noncontrolling interests

  (1,144   (2,322   50.7   
  

 

 

   

 

 

   

Net income attributable to TSYS common shareholders

$ 77,755      49,303      57.7
  

 

 

   

 

 

   

Basic earnings per share(EPS):

Income from continuing operations to TSYS common shareholders*

$ 0.42      0.26      60.4 

Gain (Loss) from discontinued operations to TSYS common shareholders*

  —        (0.00   nm   
  

 

 

   

 

 

   

Basic EPS

$ 0.42      0.26      60.5
  

 

 

   

 

 

   

Diluted EPS:

Income from continuing operations to TSYS common shareholders*

$ 0.42      0.26      61.8

Gain (Loss) from discontinued operations to TSYS common shareholders*

  —        (0.00   nm   
  

 

 

   

 

 

   

Diluted EPS

$ 0.42      0.26      61.8
  

 

 

   

 

 

   

Weighted average shares outstanding:

Basic

  184,481      187,752   
  

 

 

   

 

 

   

Diluted

  185,563      190,384   
  

 

 

   

 

 

   

Dividends declared per share

$ 0.10      0.10   
  

 

 

   

 

 

   

Amounts attributable to TSYS common shareholders:

Income from continuing operations, net of tax

$ 77,755      49,321      57.7

Gain (Loss) from discontinued operations, net of tax

  —        (18   nm   
  

 

 

   

 

 

   

Net income

$ 77,755      49,303      57.7
  

 

 

   

 

 

   

Non-GAAP measures:

Adjusted EPS from continuing operations

$ 0.54      0.38      41.2
  

 

 

   

 

 

   

Adjusted EBITDA

$ 193,454      149,596      29.3
  

 

 

   

 

 

   

nm = not meaningful

* EPS amounts may not total due to rounding.

 

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TSYS Announces First Quarter 2015 Earnings

Page 5 of 11

 

 

TSYS

Segment Breakdown

(unaudited)

(in thousands)

 

 

     Three Months Ended March 31,  
                 Change  
     2015     2014     $     %  

Revenues before reimbursable items:

        

North America Services

   $ 266,219        224,368        41,851        18.7

International Services

     73,730        76,773        (3,043     (4.0

Merchant Services

     110,398        104,625        5,773        5.5   

NetSpend

     155,074        132,640        22,434        16.9   

Intersegment revenues

     (9,637     (5,656     (3,981     (70.4
  

 

 

   

 

 

   

 

 

   

Revenues before reimbursable items from external customers

$ 595,784      532,750      63,034      11.8
  

 

 

   

 

 

   

 

 

   

Total revenues:

North America Services

$ 309,233      262,178      47,055      17.9

International Services

  79,802      82,378      (2,576   (3.1

Merchant Services

  129,104      122,690      6,414      5.2   

NetSpend

  155,074      132,640      22,434      16.9   

Intersegment revenues

  (11,057   (7,038   (4,019   (57.1
  

 

 

   

 

 

   

 

 

   

Revenues from external customers

$ 662,156      592,848      69,308      11.7
  

 

 

   

 

 

   

 

 

   

Depreciation and amortization:

North America Services

$ 23,064      20,276      2,788      13.8

International Services

  8,778      9,805      (1,027   (10.5

Merchant Services

  4,277      3,400      877      25.8   

NetSpend

  2,293      1,735      558      32.2   
  

 

 

   

 

 

   

 

 

   

Segment depreciation and amortization

  38,412      35,216      3,196      9.1   

Acquisition intangible amortization

  23,867      24,313      (446   (1.8

Corporate admin and other

  536      506      30      5.9   
  

 

 

   

 

 

   

 

 

   

Total depreciation and amortization

$ 62,815      60,035      2,780      4.6
  

 

 

   

 

 

   

 

 

   

Adjusted segment operating income:

North America Services

$ 102,570      74,578      27,992      37.5

International Services

  6,983      4,555      2,428      53.3   

Merchant Services

  34,115      30,168      3,947      13.1   

NetSpend

  35,467      28,717      6,750      23.5   
  

 

 

   

 

 

   

 

 

   

Total adjusted segment operating income

  179,135      138,018      41,117      29.8   

Acquisition intangible amortization

  (23,867   (24,313   446      1.8   

NetSpend M&A operating expenses

  —        (1,253   1,253      nm   

Share-based compensation

  (8,143   (7,611   (532   (7.0

Corporate admin and other

  (24,629   (24,144   (485   (2.0
  

 

 

   

 

 

   

 

 

   

Operating income

$ 122,496      80,697      41,799      51.8
  

 

 

   

 

 

   

 

 

   

Other:

Reimbursable items:

North America Services

$ 43,014      37,810      5,204      13.8

International Services

  6,072      5,605      467      8.3   

Merchant Services

  18,706      18,065      641      3.5   

NetSpend

  —        —        —        na   

Intersegment revenues

  (1,420   (1,382   (38   (2.7
  

 

 

   

 

 

   

 

 

   

Reimbursable items

$ 66,372      60,098      6,274      10.4
  

 

 

   

 

 

   

 

 

   

 

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TSYS Announces First Quarter 2015 Earnings

Page 6 of 11

 

 

TSYS

Condensed Balance Sheet

(unaudited)

(in thousands)

 

 

     Mar 31, 2015     Dec 31, 2014  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 328,112        289,183   

Accounts receivable, net

     315,524        283,203   

Other current assets

     117,004        118,167   
  

 

 

   

 

 

 

Total current assets

  760,640      690,553   

Goodwill

  1,546,185      1,547,397   

Other intangible assets, net

  385,161      404,107   

Property, equipment and software, net

  650,795      656,733   

Other long term assets

  434,657      434,791   
  

 

 

   

 

 

 

Total assets

$ 3,777,438      3,733,581   
  

 

 

   

 

 

 

Liabilities

Current liabilities:

Accounts payable

$ 58,473      48,793   

Bonds, notes and capital leases

  45,526      50,911   

Other current liabilities

  240,494      196,809   
  

 

 

   

 

 

 

Total current liabilities

  344,493      296,513   

Bonds, notes and capital leases, excluding current portion

  1,396,044      1,405,106   

Other long-term liabilities

  299,480      309,826   
  

 

 

   

 

 

 

Total liabilities

  2,040,017      2,011,445   
  

 

 

   

 

 

 

Redeemable noncontrolling interest

  23,397      22,492   
  

 

 

   

 

 

 

Equity

Shareholders’ equity

  1,707,677      1,692,762   
  

 

 

   

 

 

 

Noncontrolling interests in consolidated subsidiaries

  6,347      6,882   
  

 

 

   

 

 

 

Total equity

  1,714,024      1,699,644   
  

 

 

   

 

 

 

Total liabilities and equity

$ 3,777,438      3,733,581   
  

 

 

   

 

 

 

 

TSYS

Selected Cash Flow Highlights

(unaudited)

(in thousands)

 

 
     Three Months Ended March 31,  
     2015     2014  

Cash flows from operating activities:

    

Net income

   $ 78,899        51,625   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Equity in income of equity investments

     (5,394     (4,096

Depreciation and amortization

     62,815        61,432   

Other non cash adjustments

     16,836        20,350   

Changes in operating assets and liabilities:

     5,336        19,395   
  

 

 

   

 

 

 

Net cash provided by operating activities

  158,492      148,706   

Net cash used in investing activities

  (41,714   (48,064

Net cash used in financing activities

  (73,756   (72,474

Cash and cash equivalents:

Effect of exchange rate changes on cash and cash equivalents

  (4,093   1,015   
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

  38,929      29,183   

Cash and cash equivalents at beginning of period

  289,183      278,230   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

  328,112      307,413   

Less cash and cash equivalents of discontinued operations at end of period

  —        33,252   
  

 

 

   

 

 

 

Cash and cash equivalents of continuing operations at end of period

$ 328,112      274,161   
  

 

 

   

 

 

 

Free cash flow

$ 114,938      101,464   
  

 

 

   

 

 

 

 

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TSYS Announces First Quarter 2015 Earnings

Page 7 of 11

 

 

TSYS

Supplemental Information

(unaudited)

 

Other:

Supplemental Information:

 

     Total Accounts on File  
(in millions)    March 2015      March 2014      %
Change
 

Consumer Credit

     364.5         234.8         55.3   

Retail

     28.3         27.5         2.6   
  

 

 

    

 

 

    

Total Consumer

  392.8      262.3      49.8   

Commercial

  42.3      40.4      4.8   

Other

  22.7      19.7      15.2   
  

 

 

    

 

 

    

Subtotal

  457.8      322.4      42.0   

Prepaid/Stored Value

  126.6      120.0      5.5   

Government Services

  74.5      63.0      18.3   

Commercial Card Single Use

  64.8      50.8      27.5   
  

 

 

    

 

 

    

Total AOF

  723.7      556.2      30.1   
  

 

 

    

 

 

    

Growth in Accounts on File (in millions):

 

     March 2014 to
March 2015
     March 2013 to
March 2014
 

Beginning balance

     556.2         478.5   

Change in accounts on file due to:

     

Internal growth of existing clients

     39.8         38.6   

New clients

     172.5         64.6   

Purges/Sales

     (44.2      (24.7

Deconversions

     (0.6      (0.8
  

 

 

    

 

 

 

Ending balance

  723.7      556.2   
  

 

 

    

 

 

 

 

     Three Months Ended March 31,  
                 Change  
     2015     2014     Inc(Dec)      %  

North America Segment:

         

Accounts on file (AOF) (in millions)

     653.2        495.5        157.7         31.8

Transactions (in millions)

     3,310.7        2,327.6        983.1         42.2

International Segment:

         

AOF (in millions)

     70.5        60.7        9.8         16.1

Transactions (in millions)

     572.0        517.9        54.1         10.5

Merchant Segment:

         

Point-of-sale transactions (in millions)

     984.6        982.2        2.4         0.2

Dollar sales volume (in millions)

   $ 11,301.6      $ 10,779.7      $ 521.9         4.8

NetSpend Segment:

         

Gross dollar volume (in millions)

   $ 7,660.7      $ 6,567.2      $ 1,093.5         16.7

Direct deposit 90-day active cards (in thousands)

     2,403.5        2,070.3        333.2         16.1

90-day active cards (in thousands)

     4,193.0        3,654.9        538.1         14.7

% of 90-day active cards with direct deposit

     57.3     56.6     

 

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TSYS Announces First Quarter 2015 Earnings

Page 8 of 11

 

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 first quarter 2015 financial results using the previous year’s foreign currency exchange rates. On a full year constant currency basis, TSYS’ total revenues grew 13.0% as compared to a reported GAAP increase of 11.7%.

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 First Quarter 2015 Earnings

Page 9 of 11

 

Reconciliation of GAAP to Non-GAAP

 

 

Constant Currency Comparison

(unaudited)

(in thousands)

 

 

     Three Months Ended March 31,  
                   Percent  
     2015      2014      Change  

Consolidated

        

Constant currency (1)

   $ 669,863         592,848         13.0

Foreign currency (2)

     (7,707      —        
  

 

 

    

 

 

    

Total revenues

$ 662,156      592,848      11.7
  

 

 

    

 

 

    

Constant currency (1)

$ 602,902      532,750      13.2

Foreign currency (2)

  (7,118   —     
  

 

 

    

 

 

    

Total revenues before reimbursable items

$ 595,784      532,750      11.8
  

 

 

    

 

 

    

Constant currency (1)

$ 122,337      80,697      51.6

Foreign currency (2)

  159      —     
  

 

 

    

 

 

    

Operating income

$ 122,496      80,697      51.8
  

 

 

    

 

 

    

International Services

Constant currency (1)

$ 87,381      82,378      6.1

Foreign currency (2)

  (7,579   —     
  

 

 

    

 

 

    

Total revenues

$ 79,802      82,378      (3.1 )% 
  

 

 

    

 

 

    

 

(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 March 31,  
                   Percent  
     2015      2014      Change  

Total revenues

   $ 662,156         592,848         11.7

Reimbursable items

     66,372         60,098         10.4   
  

 

 

    

 

 

    

Revenues before reimbursable items

$ 595,784      532,750      11.8
  

 

 

    

 

 

    

 

 

Reconciliation of Cash Provided by Operating Activities to Available Free Cash Flow

(unaudited)

(in thousands)

 

 

     Three Months Ended March 31,  
     2015      2014  

Net cash provided by operating activities

   $ 158,492         148,706   

Capital expenditures

     (43,554      (47,242
  

 

 

    

 

 

 

Free cash flow

  114,938      101,464   

Principal payments on debt and capital leases

  (15,085   (22,277
  

 

 

    

 

 

 

Available free cash flow

$ 99,853      79,187   
  

 

 

    

 

 

 

 

- more -


TSYS Announces First Quarter 2015 Earnings

Page 10 of 11

 

Reconciliation of GAAP to Non-GAAP

 

 

Adjusted Earnings per Share

(unaudited)

(in thousands, except per share data)

 

 

     Three Months Ended March 31,  
                   Percent  
     2015      2014      Change  

Income from continuing operations attributable to TSYS common shareholders

   $ 77,755         49,321         57.7

Adjust for amounts attributable to TSYS common shareholders:

        

Add: Acquisition intangible amortization, net of taxes

     15,761         15,813         (0.3

Add: Share-based compensation, net of taxes

     5,441         5,017         8.4   

Add: NetSpend M&A expenses, net of taxes*

     —           1,204         nm   
  

 

 

    

 

 

    

Adjusted earnings

$ 98,957      71,355      38.7
  

 

 

    

 

 

    

Basic EPS - Income from continuing operations attributable to TSYS common shareholders

As reported (GAAP)

$ 0.42      0.26      60.4
  

 

 

    

 

 

    

Adjust for amounts attributable to TSYS common shareholders:

Add: Acquisition intangible amortization, net of taxes

  0.09      0.08      1.4   

Add: Share-based compensation, net of taxes

  0.03      0.03      10.5   

Add: NetSpend M&A expenses, net of taxes*

  —        0.01      nm   
  

 

 

    

 

 

    

Adjusted EPS **

$ 0.54      0.38      41.2
  

 

 

    

 

 

    

Average common shares and participating securities

  184,481      187,752   
  

 

 

    

 

 

    

 

* 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 March 31,  
                 Percent  
     2015     2014     Change  

Net income

   $ 78,899        51,625        52.8

Adjust for:

      

Deduct: Loss (Income) from discontinued operations

     —          (980     nm   

Deduct: Equity in income of equity investments

     (5,394     (4,096     (31.7

Add: Income taxes

     39,782        24,335        63.5   

Add: Nonoperating expense

     9,209        9,813        (6.2

Add: Depreciation and amortization

     62,815        60,035        4.6   
  

 

 

   

 

 

   

EBITDA

$ 185,311      140,732      31.7

Adjust for:

Add: Share-based compensation

  8,143      7,611      7.0   

Add: NetSpend M&A operating expenses

  —        1,253      nm   
  

 

 

   

 

 

   

Adjusted EBITDA

$ 193,454      149,596      29.3
  

 

 

   

 

 

   

nm = not meaningful

 

- more -


TSYS Announces First Quarter 2015 Earnings

Page 11 of 11

 

Reconciliation of GAAP to Non-GAAP

 

 

Segment Operating Margin and Consolidated Adjusted Operating Margin

(unaudited)

(in thousands)

 

 

    Three Months Ended March 31, 2015     Three Months Ended March 31, 2014  
    Adjusted Segment     Revenues before     Adjusted     Adjusted Segment     Revenues before     Adjusted  
    Operating Income     Reimbursable Items     Operating Margin     Operating Income     Reimbursable Items     Operating Margin  

North America Services

  $ 102,570        266,219        38.53   $ 74,578        224,368        33.24

International Services

    6,983        73,730        9.47        4,555        76,773        5.93   

Merchant Services

    34,115        110,398        30.90        30,168        104,625        28.83   

NetSpend

    35,467        155,074        22.87        28,717        132,640        21.65   

Intersegment

    —          (9,637       —          (5,656  

Corporate admin and other

    (24,629     —            (24,144     —       
 

 

 

   

 

 

     

 

 

   

 

 

   

Adjusted operating margin

$ 154,506      595,784      25.93 $ 113,874      532,750      21.37

Acquisition intangible amortization

  (23,867   (24,313

NetSpend M&A operating expenses

  —        (1,253

Share-based compensation

  (8,143   (7,611
 

 

 

   

 

 

     

 

 

   

 

 

   

Operating income and margin*

$ 122,496      595,784      20.56 $ 80,697      532,750      15.15

Reimbursable items

  66,372      60,098   
 

 

 

   

 

 

     

 

 

   

 

 

   

Operating margin (US GAAP)

$ 122,496      662,156      18.50 $ 80,697      592,848      13.61
 

 

 

   

 

 

     

 

 

   

 

 

   

 

* Operating margin on revenue before reimbursable items

 

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