EX-99.1 2 d184621dex991.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 2016 Adjusted EPS Grew 22.8%

Closes TransFirst Acquisition and Raises 2016 Guidance

COLUMBUS, Ga., April 26, 2016 — TSYS (NYSE: TSS) today reported results for the first quarter of 2016 and raised its guidance after the acquisition of TransFirst, which closed on April 1, 2016. TSYS’ results for the first quarter do not include the results of TransFirst.

“Our financial performance for the first quarter was outstanding across all four of our segments. These results reflect exceptional execution by the TSYS team as we progress toward achieving our vision to become the leading global payment solutions provider and to deliver outstanding returns to our shareholders,” said M. Troy Woods, chairman, president and chief executive officer of TSYS.

Highlights for the first quarter of 2016 include:

 

    Adjusted EPS from continuing operations were $0.66, an increase of 22.8%. On a GAAP basis, basic EPS from continuing operations were $0.49, an increase of 17.3%.

 

    Income from continuing operations attributable to TSYS’ shareholders was $90.6 million, an increase of 16.6%.

 

    Adjusted EBITDA was $230.8 million, an increase of 19.3%.

 

    Total revenues for the quarter were $739.4 million, an increase of 11.7%. Net revenue was $671.6 million, an increase of 12.7%.

 

    Adjusted operating margin was 27.7%, an increase of 178 basis points. GAAP operating margin was 20.5%.

“We are excited to include TransFirst in our revised guidance for 2016 that includes a net revenue range in excess of $3.0 billion and an adjusted earnings per share growth range of 13% to 16%. As a result of this transaction, TSYS is the 6th largest1 U.S. acquirer based on net revenue and supports more than 645,000 merchant outlets. With the added strength of TransFirst, TSYS is uniquely positioned as a top tier provider in issuer processing, merchant acquiring and prepaid program management delivering on our strategic goal of being a leader in all markets we serve,” said Woods.

 

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LOGO

 

TSYS Reports First Quarter 2016 Adjusted EPS Grew 22.8%

The following table provides TSYS’ revised guidance for 2016 including TransFirst from April 1, 2016. Included is the introduction of a new adjusted revenue disclosure, net revenue, that better aligns our reporting with how the company’s management measures performance internally. A reconciliation of net revenue, which is a non-GAAP measure, to GAAP revenues is included on page 10 of this press release.

 

     2016 Revised Financial Outlook**  
     Range
(in millions, except per
share amounts)
     Percent
Change
 

Total revenues

   $ 4,182         to       $ 4,264         50     to         53

Net revenue

   $ 3,040         to       $ 3,102         22     to         24

Adjusted EPS attributable to TSYS common shareholders from continuing operations*

   $ 2.78         to       $ 2.85         13     to         16

* Average Basic Weighted Shares

     183.6              
  ** The revised guidance includes TransFirst’s operating results for nine months of 2016, excludes one-time expenses incurred in connection with the TransFirst acquisition and assumes no significant movement in foreign exchange rates.

 

  1 Pro forma ranking per First Annapolis Consulting and based on 2014 net revenue (gross revenue less interchange, assessments and card brand pass-throughs)

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, April 26. 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, net revenue, adjusted EBITDA and adjusted EPS, and a reconciliation of those measures to the most directly comparable GAAP measures are included on pages 9 to 12 of this release.

 

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LOGO

 

TSYS Reports First Quarter 2016 Adjusted EPS Grew 22.8%

About TSYS

TSYS® (NYSE: TSS) unlocks opportunities in payments for payment providers, businesses and consumers. Our headquarters are in Columbus, Georgia, USA, and we operate in more than 80 countries with local offices across the Americas, EMEA and Asia-Pacific.

We provide seamless, secure and innovative solutions across the payments spectrum — from issuer processing and merchant acquiring to prepaid program management — delivered through partnership and expertise. We succeed because we put people, and their needs, at the heart of every decision. It’s an approach we call ‘People-Centered Payments®’.

Our industry is changing every day — and we’re leading the way towards the payments of tomorrow. We routinely post all important information on our website. For more, visit us at tsys.com.

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 2016 total revenues, net revenue 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, particularly the recently closed TransFirst acquisition; 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 First Quarter 2016 Earnings

Page 4 of 12

 

 

TSYS

Financial Highlights

(unaudited)

(in thousands, except per share data)

 

 

     Three Months Ended
March 31,
 
     2016     2015     Percent
Change
 

Total revenues

   $ 739,378        662,156        11.7

Cost of services

     480,556        449,705        6.9   

Selling, general and administrative expenses

     107,135        89,955        19.1   
  

 

 

   

 

 

   

Total expenses

     587,691        539,660        8.9   
  

 

 

   

 

 

   

Operating income

     151,687        122,496        23.8   

Nonoperating expenses

     (22,440     (9,209     nm   
  

 

 

   

 

 

   

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

     129,247        113,287        14.1   

Income taxes

     43,429        39,782        9.2   
  

 

 

   

 

 

   

Income before noncontrolling interests and equity in income of equity investments

     85,818        73,505        16.8   

Equity in income of equity investments, net of tax

     6,590        5,394        22.2   
  

 

 

   

 

 

   

Net income

     92,408        78,899        17.1   

Net income attributable to noncontrolling interests

     (1,780     (1,144     (55.6
  

 

 

   

 

 

   

Net income attributable to TSYS common shareholders

   $ 90,628        77,755        16.6
  

 

 

   

 

 

   

Earnings per share (EPS):

      

Basic EPS

   $ 0.49        0.42        17.3
  

 

 

   

 

 

   

Diluted EPS

   $ 0.49        0.42        17.6
  

 

 

   

 

 

   

Weighted average shares outstanding:

(includes participating securities)

      

Basic

     183,256        184,481     
  

 

 

   

 

 

   

Diluted

     183,886        185,563     
  

 

 

   

 

 

   

Dividends declared per share

   $ 0.10        0.10     
  

 

 

   

 

 

   

Non-GAAP measures:

      

Net revenue

   $ 671,644        595,784        12.7
  

 

 

   

 

 

   

Adjusted EPS from continuing operations

   $ 0.66        0.54        22.8
  

 

 

   

 

 

   

Adjusted EBITDA

   $ 230,829        193,454        19.3
  

 

 

   

 

 

   

nm = not meaningful

 

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TSYS Announces First Quarter 2016 Earnings

Page 5 of 12

 

 

TSYS

Segment Breakdown

(unaudited)

(in thousands)

 

 

     Three Months Ended March 31,  
                 Change  
     2016     2015     $     %  

Net revenue

        

North America Services

   $ 303,641        266,219        37,422        14.1

International Services

     75,354        73,730        1,624        2.2   

Merchant Services

     120,612        110,398        10,214        9.3   

NetSpend

     184,992        155,074        29,918        19.3   

Intersegment revenues

     (12,955     (9,637     (3,318     (34.4
  

 

 

   

 

 

   

 

 

   

Net revenue from external customers

   $ 671,644        595,784        75,860        12.7
  

 

 

   

 

 

   

 

 

   

Depreciation and amortization:

        

North America Services

   $ 27,483        23,064        4,419        19.2

International Services

     8,136        8,778        (642     (7.3

Merchant Services

     5,050        4,277        773        18.1   

NetSpend

     3,109        2,293        816        35.6   
  

 

 

   

 

 

   

 

 

   

Segment depreciation and amortization

     43,778        38,412        5,366        14.0   

Acquisition intangible amortization

     22,921        23,867        (946     (4.0

Corporate admin and other

     884        536        348        64.9   
  

 

 

   

 

 

   

 

 

   

Total depreciation and amortization

   $ 67,583        62,815        4,768        7.6
  

 

 

   

 

 

   

 

 

   

Adjusted segment operating income:

        

North America Services

   $ 124,788        102,570        22,218        21.7

International Services

     10,289        6,983        3,306        47.3   

Merchant Services

     38,357        34,115        4,242        12.4   

NetSpend

     42,201        35,467        6,734        19.0   
  

 

 

   

 

 

   

 

 

   

Total adjusted segment operating income

     215,635        179,135        36,500        20.4   

Acquisition intangible amortization

     (22,921     (23,867     946        4.0   

TransFirst M&A operating expenses

     (3,401     —          (3,401     nm   

Share-based compensation

     (8,158     (8,143     (15     (0.2

Corporate admin and other

     (29,468     (24,629     (4,839     (19.6
  

 

 

   

 

 

   

 

 

   

Operating income

   $ 151,687        122,496        29,191        23.8
  

 

 

   

 

 

   

 

 

   

nm = not meaningful

 

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TSYS Announces First Quarter 2016 Earnings

Page 6 of 12

 

 

TSYS

Condensed Balance Sheet

(unaudited)

(in thousands)

 

 

     March 31, 2016      December 31, 2015  

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 1,932,111         389,328   

Accounts receivable, net

     349,271         314,705   

Other current assets

     145,052         154,199   
  

 

 

    

 

 

 

Total current assets

     2,426,434         858,232   

Goodwill

     1,545,631         1,545,424   

Other intangible assets, net

     309,372         328,320   

Property, equipment and software, net

     679,903         694,968   

Other long term assets

     462,593         450,951   
  

 

 

    

 

 

 

Total assets

   $ 5,423,933         3,877,895   
  

 

 

    

 

 

 

Liabilities

     

Current liabilities:

     

Accounts payable

   $ 44,526         52,213   

Bonds, notes and capital leases

     21,647         53,546   

Other current liabilities

     217,524         233,173   
  

 

 

    

 

 

 

Total current liabilities

     283,697         338,932   

Bonds, notes and capital leases, excluding current portion

     2,887,247         1,377,541   

Other long-term liabilities

     306,362         289,330   
  

 

 

    

 

 

 

Total liabilities

     3,477,306         2,005,803   
  

 

 

    

 

 

 

Redeemable noncontrolling interest

     25,086         23,410   
  

 

 

    

 

 

 

Equity

     

Shareholders’ equity

     1,921,541         1,843,018   
  

 

 

    

 

 

 

Noncontrolling interests in consolidated subsidiaries

     —           5,664   
  

 

 

    

 

 

 

Total equity

     1,921,541         1,848,682   
  

 

 

    

 

 

 

Total liabilities and equity

   $ 5,423,933         3,877,895   
  

 

 

    

 

 

 

Note: TSYS adopted Accounting Standards Update (ASU) 2015-03 “Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Cost” on January 1, 2016. This ASU requires TSYS to present debt issuance costs in the balance sheet as a direct deduction from the carrying amount of the corresponding debt liability, consistent with debt discounts. All prior periods presented have been restated for this ASU.

TSYS also adopted ASU 2015-17 “Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes” on January 1, 2016. This ASU requires the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. All prior periods presented have been restated for this ASU.

 

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TSYS Announces First Quarter 2016 Earnings

Page 7 of 12

 

 

TSYS

Selected Cash Flow Highlights

(unaudited)

(in thousands)

 

 

     Three Months Ended March 31,  
     2016     2015  

Cash flows from operating activities:

    

Net income

   $ 92,408        78,899   

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

    

Equity in income of equity investments

     (6,590     (5,394

Dividends received from equity investments

     —          —     

Depreciation and amortization

     67,583        62,815   

Other noncash adjustments

     47,629        16,836   

Changes in operating assets and liabilities

     (55,202     5,336   
  

 

 

   

 

 

 

Net cash provided by operating activities

     145,828        158,492   

Net cash used in investing activities

     (44,388     (41,714

Net cash provided by (used in) financing activities

     1,442,012        (73,756

Cash and cash equivalents:

    

Effect of exchange rate changes on cash and cash equivalents

     (669     (4,093
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     1,542,783        38,929   

Cash and cash equivalents at beginning of period

     389,328        289,183   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 1,932,111        328,112   
  

 

 

   

 

 

 

Supplemental - Non-GAAP:

    

Net cash provided by operating activities

   $ 145,828        158,492   

Capital expenditures

     (44,388     (43,554
  

 

 

   

 

 

 

Free cash flow

     101,440        114,938   

Principal payments on debt and capital leases*

     (9,654     (15,086
  

 

 

   

 

 

 

Available free cash flow

   $ 91,786        99,852   
  

 

 

   

 

 

 

 

* Less accelerated principal payments

 

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TSYS Announces First Quarter 2016 Earnings

Page 8 of 12

 

 

TSYS

Supplemental Information

(unaudited)

 

Other

Accounts on File (AOF):

     Total Accounts on File  
(in millions)    March 2016      March 2015      %
Change
 

Consumer

     414.8         392.8         5.6   

Commercial

     46.3         42.3         9.3   

Other

     27.7         22.7         22.5   
  

 

 

    

 

 

    

Traditional AOF

     488.8         457.8         6.8   

Prepaid*/Stored Value

     103.1         126.6         (18.6

Government Services

     82.7         74.5         11.1   

Commercial Card Single Use

     75.9         64.8         17.1   
  

 

 

    

 

 

    

Total AOF

     750.5         723.7         3.7   
  

 

 

    

 

 

    

 

* Prepaid does not include NetSpend accounts

Growth in Accounts on File (in millions):

 

     March 2015 to
March 2016
     March 2014 to
March 2015
 

Beginning balance

     723.7         556.2   

Change in accounts on file due to:

     

Internal growth of existing clients

     52.3         39.8   

New clients

     43.1         172.5   

Purges/Sales

     (24.3      (44.2

Deconversions

     (44.3      (0.6
  

 

 

    

 

 

 

Ending balance

     750.5         723.7   
  

 

 

    

 

 

 

Segment data:

 

     Three Months Ended March 31,  
                 Change  
     2016     2015     Inc(Dec)      %  

North America Segment:

         

AOF (in millions)

     669.7        653.2        16.5         2.5

Traditional AOF (in millions)

     423.3        396.3        27.0         6.8

Transactions (in millions)

     3,969.5        3,310.7        658.8         19.9

International Segment:

         

AOF (in millions)

     80.8        70.5        10.3         14.7

Traditional AOF (in millions)

     65.5        61.5        4.0         6.6

Transactions (in millions)

     618.3        572.0        46.3         8.1

Merchant Segment:

         

Point-of-sale transactions (in millions)

     1,091.0        984.6        106.4         10.8

Dollar sales volume (in millions)

   $ 11,783.4      $ 11,301.6      $ 481.8         4.3

NetSpend Segment:

         

Gross dollar volume (in millions)

   $ 9,161.5      $ 7,660.7      $ 1,500.8         19.6

Direct deposit 90-day active cards (in thousands)

     2,789.2        2,403.5        385.7         16.0

90-day active cards (in thousands)

     4,881.6        4,193.0        688.6         16.4

% of 90-day active cards with direct deposit

     57.1     57.3     

 

 

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TSYS Announces First Quarter 2016 Earnings

Page 9 of 12

 

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 2016 financial results using the previous year’s foreign currency exchange rates. On a full year constant currency basis, TSYS’ total revenues grew 12.5% 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 schedule below provides a reconciliation of total revenues to net revenue. Net revenue is defined as total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment networks that are recorded by TSYS as expense.

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 2016 Earnings

Page 10 of 12

 

Reconciliation of GAAP to Non-GAAP

 

 

Constant Currency Comparison

(unaudited)

(in thousands)

 

 

 

     Three Months Ended March 31,  
                  Percent  
     2016     2015      Change  

Consolidated

       

Constant currency (1)

   $ 744,974        662,156         12.5

Foreign currency impact (2)

     (5,596     —        
  

 

 

   

 

 

    

Total revenues

   $ 739,378        662,156         11.7
  

 

 

   

 

 

    

Constant currency (1)

   $ 676,845        595,784         13.6

Foreign currency impact (2)

     (5,201     —        
  

 

 

   

 

 

    

Net revenue

   $ 671,644        595,784         12.7
  

 

 

   

 

 

    

Constant currency (1)

   $ 152,781        122,496         24.7

Foreign currency impact (2)

     (1,094     —        
  

 

 

   

 

 

    

Operating income

   $ 151,687        122,496         23.8
  

 

 

   

 

 

    

International Services

       

Constant currency (1)

   $ 86,611        79,802         8.5

Foreign currency impact (2)

     (5,538     —        
  

 

 

   

 

 

    

Total revenues

   $ 81,073        79,802         1.6
  

 

 

   

 

 

    

 

(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.

 

 

Net Revenue

(unaudited)

(in thousands)

 

 

 

     Three Months Ended March 31,  
                   Percent  
     2016      2015      Change  

Total revenues

   $ 739,378         662,156         11.7

Reimbursable items

     67,734         66,372         2.1   

Interchange & assessments expense

     —           —           —     
  

 

 

    

 

 

    

Net revenue

   $ 671,644         595,784         12.7
  

 

 

    

 

 

    

 

- more -


TSYS Announces First Quarter 2016 Earnings

Page 11 of 12

 

Reconciliation of GAAP to Non-GAAP

 

 

Adjusted Earnings per Share

(unaudited)

(in thousands, except per share data)

 

 

 

     Three Months Ended March 31,  
                   Percent  
     2016      2015      Change  

Income from continuing operations attributable to TSYS common shareholders

   $ 90,628         77,755         16.6

Adjust for amounts attributable to TSYS common shareholders:

        

Add: Acquisition intangible amortization, net of taxes

     15,021         15,761         (4.7

Add: Share-based compensation, net of taxes

     5,406         5,441         (0.6

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

     9,655         —           nm   
  

 

 

    

 

 

    

Adjusted earnings

   $ 120,710         98,957         22.0
  

 

 

    

 

 

    

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

        

As reported (GAAP)

   $ 0.49         0.42         17.3
  

 

 

    

 

 

    

Adjust for amounts attributable to TSYS common shareholders:

        

Add: Acquisition intangible amortization, net of taxes

     0.08         0.09         (4.0

Add: Share-based compensation, net of taxes

     0.03         0.03         (0.1

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

     0.05         —           nm   
  

 

 

    

 

 

    

Adjusted EPS **

   $ 0.66         0.54         22.8
  

 

 

    

 

 

    

Weighted average shares outstanding

     183,256         184,481      
  

 

 

    

 

 

    

 

* 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  
     2016     2015     Change  

Net income

   $ 92,408        78,899        17.1

Adjust for:

      

Deduct: Equity in income of equity investments

     (6,590     (5,394     (22.2

Add: Income taxes

     43,429        39,782        9.2   

Add: Nonoperating expense

     22,440        9,209        nm   

Add: Depreciation and amortization

     67,583        62,815        7.6   
  

 

 

   

 

 

   

EBITDA

   $ 219,270        185,311        18.3

Adjust for:

      

Add: Share-based compensation

     8,158        8,143        0.2   

Add: TransFirst M&A operating expenses

     3,401        —          nm   
  

 

 

   

 

 

   

Adjusted EBITDA

   $ 230,829        193,454        19.3
  

 

 

   

 

 

   

nm = not meaningful

 

- more -


TSYS Announces First Quarter 2016 Earnings

Page 12 of 12

 

Reconciliation of GAAP to Non-GAAP

 

 

Segment Operating Margin and Consolidated Adjusted Operating Margin

(unaudited)

(in thousands)

 

 

    Three Months Ended March 31, 2016     Three Months Ended March 31, 2015  
    Adjusted Segment           Adjusted     Adjusted Segment           Adjusted  
    Operating Income     Net Revenue     Operating Margin     Operating Income     Net Revenue     Operating Margin  

North America Services

  $ 124,788        303,641        41.10   $ 102,570        266,219        38.53

International Services

    10,289        75,354        13.65        6,983        73,730        9.47   

Merchant Services

    38,357        120,612        31.80        34,115        110,398        30.90   

NetSpend

    42,201        184,992        22.81        35,467        155,074        22.87   

Intersegment

    —          (12,955       —          (9,637  

Corporate admin and other

    (29,468         (24,629    
 

 

 

   

 

 

     

 

 

   

 

 

   

Adjusted operating margin

  $ 186,167        671,644        27.72   $ 154,506        595,784        25.93

Acquisition intangible amortization

    (22,921         (23,867    

TransFirst M&A operating expenses

    (3,401         —         

Share-based compensation

    (8,158         (8,143    
 

 

 

   

 

 

     

 

 

   

 

 

   

Operating income and margin*

  $ 151,687        671,644        22.58   $ 122,496        595,784        20.56

Reimbursable items

      67,734            66,372     
 

 

 

   

 

 

     

 

 

   

 

 

   

Operating income and margin (US GAAP)

  $ 151,687        739,378        20.52   $ 122,496        662,156        18.50
 

 

 

   

 

 

     

 

 

   

 

 

   

 

* Operating margin on net revenue

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